Digi Power X Inc S-3, filed Apr 9, 2026
Digi Power X Inc. (DGXX)
As filed with the Securities and Exchange Commission on April 9, 2026
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Digi Power X Inc.
(Exact name of registrant as specified in its charter)
| British Columbia, Canada | Not Applicable | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
110 Yonge Street, Suite 1601
Toronto, Ontario M5C 1T4
(818) 280-9758
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Cogency Global Inc.
122 E. 42nd Street, 18th Floor
New York, New York 10168
(800) 221-0102
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
|
Mark D. Wood |
| Alyse A. Sagalchik |
| Katten Muchin Rosenman LLP |
| 525 W. Monroe Street |
| Chicago, IL 60661 |
| (312) 902-5200 |
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement.
If the 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, other than securities offered only in connection with dividend or interest reinvestment plans, 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.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. 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 a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
☐ | Accelerated filer | ☐ | |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |
| Emerging growth company | ☒ |
If an emerging growth company, 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 Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement contains:
| ● | a base prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $750,000,000 of the securities identified therein from time to time in one or more offerings; |
| ● | a prospectus supplement covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $75,000,000 of our subordinate voting shares that may be issued and sold from time to time pursuant to an amended and restated sales agreement with A.G.P./Alliance Global Partners (the “sales agreement prospectus supplement”, and together with the base prospectus, the “sales agreement prospectus”); and |
| ● | a resale prospectus covering the offering and sale by the selling securityholders named therein (the “Selling Securityholders”) of up to 501,788 previously issued subordinate voting shares, no par value, of Digi Power X Inc. (the “Company”) and 791,958 subordinate voting shares issuable upon the exercise of warrants, in each case, held by the Selling Securityholders (the “resale prospectus”). |
The base prospectus immediately follows this explanatory note. The material terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The sales agreement prospectus supplement immediately follows the base prospectus, and the resale prospectus immediately follows the sales agreement prospectus supplement.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated April 9, 2026
PROSPECTUS
DIGI POWER X INC.
$750,000,000
Subordinate Voting Shares
Debt Securities
Warrants
Subscription Receipts
Share Purchase Contracts
Convertible Securities
Rights
Units
We may offer and sell up to $750,000,000 in the aggregate of the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description of the securities.
Each time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement before you invest in any of our securities.
We may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement to the extent appropriate or required by law. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE S-4 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our subordinate voting shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “DGXX” and on Cboe Canada (“Cboe”) under the symbol “DGX.” On April 8, 2026, the closing price of the subordinate voting shares on Nasdaq and Cboe was $2.40 and C$3.33, respectively.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2026
TABLE OF CONTENTS
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This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time and in one or more offerings up to a total dollar amount of $750,000,000, as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. The prospectus supplement or free writing prospectus may also add, update or change information contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or free writing prospectus, you should rely on the prospectus supplement or free writing prospectus, as applicable. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement (and any applicable free writing prospectuses), together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We have not authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover, that the information appearing in any applicable free writing prospectus is accurate only as of the date of that free writing prospectus, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference or, in each case, any earlier date specified for such information, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates. This prospectus incorporates by reference, and any prospectus supplement or free writing prospectus may contain and incorporate by reference, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information, and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated by reference in this prospectus, any prospectus supplement or any applicable free writing prospectus may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. Accordingly, investors should not place undue reliance on this information.
When we refer to “DGXX,” “we,” “our,” “us” and the “Company” in this prospectus, we mean Digi Power X Inc. and its consolidated subsidiaries, unless the context otherwise requires. When we refer to “you,” we mean the potential holders of the applicable series of securities.
In this prospectus, unless otherwise indicated, all dollar amounts and references to “US$” or “$” are to U.S. dollars, and references to “C$” are to Canadian dollars. This prospectus and the documents incorporated by reference contain translations of certain U.S. dollar amounts into Canadian dollars solely for your convenience.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any applicable prospectus supplement contain “forward-looking information” and “forward-looking statements” within the meaning of the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Canadian securities laws (collectively, “forward-looking statements”), which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this prospectus and any applicable prospectus supplement are forward-looking statements, including any statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives and expected market growth. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include, but are not limited to, the risks described under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations.
The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
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WHERE YOU CAN FIND MORE
INFORMATION;
INCORPORATION BY REFERENCE
Available Information
We file reports and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is www.sec.gov.
Our website address is www.digipowerx.com. The information on our website, however, is not, and should not be deemed to be, a part of or incorporated by reference into this prospectus.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Other documents establishing the terms of any offered securities are or may be filed as exhibits to the registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in this prospectus or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or a subsequently filed document incorporated by reference modifies or replaces that statement.
This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:
| ● | our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026; and |
| ● | the description of our securities registered pursuant to Section 12 of the Exchange Act contained in Exhibit 4.18 to our Annual Report Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on July 14, 2023, as updated by any amendment or report filed for the purpose of updating such description, including the section of this prospectus titled “Description of Share Capital.” |
All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You may request a free copy of any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address:
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario, M5C 1T4
(818) 280-9758
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus supplement.
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The Company is an innovative energy infrastructure company that develops cutting-edge data centers to drive the expansion of sustainable energy assets. With multiple sites, including our state-of-the-art combined cycle and high-capacity substations, we tap into and enhance the energy grid, supporting both industrial clients and broader energy markets. Our mission is to create efficient, reliable and cost-effective energy solutions by maximizing the potential of our power facilities and building advanced infrastructure to meet the demands of high-performance computing, bitcoin mining and other energy-intensive industries. Digi Power X is focused on developing, owning and operating data center facilities and delivering enterprise colocation and AI/GPU infrastructure services. The Company also owns a 60 MW gas fired power plant in North Tonawanda that currently operates as a peaker plant, providing the grid with electrical power in times of peak demand.
The Company receives digital currencies from “mining.” “Mining” is a process whereby “miners”, which are specialized computers with high amounts of computational processing power, compete to solve “blocks”, which are digital files where digital currency transactions are recorded on the blockchain. A miner that verifies and solves a new block is awarded newly-generated quantity of coins, an amount which is usually proportional to the miner’s contributed hashrate or work (plus a small transaction fee), as an incentive to invest their computer power, as mining is critical to the continuing functioning and security of the networks on which digital currencies operate.
A “Mining Pool” is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network. The Company participates in a Mining Pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula, which calculates payout primarily based on the hashrate provided by the Company to the Mining Pool as a percentage of total network hashrate of the Mining Pool, along with other inputs. The Company is entitled to consideration even if a block is not successfully placed by the Mining Pool operator. The Company transitioned its mining operations completely to Mining Pool participation in 2022, which it utilized for the years ended December 31, 2024 and 2025 and continues to use for its Bitcoin mining operations.
The Company has three facilities located in Buffalo, New York, North Tonawanda, New York and Columbiana, Alabama. The Company’s site in North Tonawanda is a 60 MW combined cycle plant with 1.2 EH of current operating hashrate. The Company’s site in Buffalo is an 18.7 MW utility powered site with an operating hashrate of 500 PH. The Company’s site in Alabama is a 22 MW utility powered site. The Company is developing its facility in Columbiana, Alabama into a 55-MW Tier 3 data center, which will be designed to support next generation AI and HPC workloads upon its completion. The Company’s facilities are strategically located in diverse geographic locations to minimize risk.
The Company was incorporated in the Province of British Columbia under the Business Corporations Act (British Columbia) (“BCBCA”) on February 18, 2017, under the name “Chortle Capital Corp.” The Company changed its name on September 18, 2017, to “HashChain Technology Inc.” Following the reverse take-over with Digihost International Inc., which closed on February 14, 2020, the Company changed its name to Digihost Technology Inc. The Company changed its name on March 6, 2025, to “Digi Power X Inc.”
Our subordinate voting shares are listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.” Our principal executive offices are located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127, and our registered office is located at 595 Howe Street - 10th Floor, Vancouver, BC V6C 2T5. Our telephone number is (818) 280-9758.
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An investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. Before deciding whether to invest in our securities, you should carefully consider the risk factors incorporated by reference to our most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q or current reports on Form 8-K, and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus supplement and any applicable free writing prospectus. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also carefully read the section entitled “Special Note Regarding Forward-Looking Statements” included in this prospectus, and any comparable section included in any applicable prospectus supplement and in the documents incorporated by reference herein and therein.
We intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.
General
The following is a summary of the material terms of our share capital, as set forth in our articles of association, and certain related sections of the BCBCA. The following summary is subject to, and is qualified in its entirety by reference to, the provisions of our articles of association and the applicable provisions of the BCBCA. A copy of our articles of association is filed as an exhibit to the registration statement of which this prospectus is a part.
Share Capital
Our authorized share capital consists of:
| ● | unlimited subordinate voting shares, no par value; and |
| ● | unlimited proportionate voting shares, no par value. |
As of April 8, 2026, there were 69,807,449 subordinate voting shares and 3,333 proportionate voting shares issued and outstanding. Proportionate voting shares are not available for distribution to the public. Proportionate voting shares may be converted at the holder’s option into subordinate voting shares at a ratio of 200 subordinate voting shares for every 1 proportionate voting share.
In addition, as of the date of this prospectus, there were: (i) 2,850,130 subordinate voting shares issuable upon the exercise of outstanding options at a weighted average exercise price of $3.59; (ii) 1,744,374 subordinate voting shares reserved for issuance on exercise of 1,744,374 issued and outstanding warrants of the Company with a weighted average exercise price of $3.03; and (iii) 2,954,279 subordinate voting shares reserved for issuance upon the vesting of 2,954,279 restricted share units, for a total of 77,356,232 subordinate voting shares on a fully diluted basis (including 666,600 subordinate voting shares issuable upon conversion of the 3,333 issued and outstanding proportionate voting shares as of such date).
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Subordinate Voting Shares
Each holder of subordinate voting shares is entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of subordinate voting shares are entitled to one vote per subordinate voting share on all matters subject to shareholder vote, voting together as a single class with holders of proportionate voting shares, except as otherwise prohibited by law.
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 will be entitled to participate ratably along with all other holders of subordinate voting shares and proportionate voting shares (on an as-converted to subordinate voting share basis).
The holders of the subordinate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu as to dividends and any declaration or payment of any dividend on the subordinate voting shares.
Except as otherwise provided in this prospectus, the subordinate voting shares and proportionate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA. Our subordinate voting shares are not subject to any pre-emptive rights, conversion or exchange rights, redemption, retraction, purchase for cancellation or surrender provisions, sinking or purchase fund provisions, provisions permitting or restricting the issuance of additional securities or provisions requiring a shareholder to contribute additional capital.
Proportionate Voting Shares
Holders of proportionate voting shares are entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of proportionate voting shares are entitled to one vote in respect of each subordinate voting share into which such proportionate voting share could ultimately then be converted, which for greater certainty, shall be equal to 200 votes per proportionate voting share, on all matters subject to shareholder vote, voting together as a single class with holders of subordinate voting shares, except as otherwise prohibited by law.
Holders of proportionate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu (on an as-converted basis, assuming conversion of all proportionate voting shares into subordinate voting shares at the conversion ratio of 200:1) as to dividends and any declaration or payment of any dividend on the subordinate voting shares. No dividend will be declared or paid on the proportionate voting shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted basis) on the subordinate voting shares.
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 proportionate voting shares will be entitled to participate ratably along with all other holders of proportionate voting shares (on an as-converted to resulting issuer subordinate voting share basis) and subordinate voting shares.
Each proportionate voting share is convertible, at the option of the holder thereof at any time after the date of issuance of such share, into fully paid and non-assessable subordinate voting shares as is determined by multiplying the number of proportionate voting shares by the 200. Proportionate voting shares are not available for distribution to the public.
Except as otherwise described in this prospectus, the proportionate voting shares and subordinate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA.
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Anti-Takeover Provisions
Some provisions of the BCBCA and other British Columbia laws could make the following transactions more difficult: an acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that shareholders may otherwise consider to be in their best interests or in our best interests, including transactions that provide for payment of a premium over the market price for our subordinate voting shares.
Listing
Our subordinate voting shares are currently listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.”
Transfer Agent and Registrar
The transfer agent and registrar for our subordinate voting shares is Marrelli Trust Company Limited, 620 – 1111 Melville St., Vancouver, British Columbia, V6E 3V6.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the debt securities sets forth certain general terms and provisions of the debt securities in respect of which a prospectus supplement will be filed. The particular terms and provisions of the debt securities offered by any prospectus supplement, and the extent to which the general terms and provisions described below may apply thereto, will be described in a prospectus supplement filed in respect of such debt securities.
Debt securities may be offered separately or in combination with one or more other securities. The Company may, from time to time, issue debt securities and incur additional indebtedness other than through the issue of debt securities pursuant to this prospectus.
Debt securities will be issued under one or more indentures (each, a “debt indenture”), in each case between the Company and an appropriately qualified entity authorized to carry on business as a trustee. The description below is not exhaustive and is subject to, and qualified in its entirety by reference to, the detailed provisions of the applicable debt indenture.
The following description sets forth certain general terms and provisions of the debt securities and is not intended to be complete. We have filed a form of indenture as Exhibit 4.5 to the registration statement of which this prospectus is a part. When debt securities are offered in the future, the prospectus supplement will explain the particular terms of those securities and the extent to which these general provisions may apply. Capitalized terms used in the summary have the meanings specified in the indenture.
General
The debt securities may be issued from time to time in one or more series and may be convertible into other securities. The Company may specify a maximum aggregate principal amount for the debt securities of any series and, unless otherwise provided in the applicable prospectus supplement, a series of debt securities may be reopened for issuance of additional debt securities of such series.
Any prospectus supplement for debt securities supplementing this prospectus will contain specific terms and other information with respect to the debt securities being offered thereby, including, but not limited to, the following:
| ● | the designation, aggregate principal amount and authorized denominations of such debt securities; |
| ● | any limit upon the aggregate principal amount of such debt securities; |
| ● | the currency or currency units for which such debt securities may be purchased and the currency or currency units in which the principal and any interest is payable (in either case, if other than Canadian dollars); |
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| ● | the issue price (at par, at a discount or at a premium) of such debt securities; |
| ● | the date or dates on which such debt securities will be issued and delivered; |
| ● | the date or dates on which such debt securities will mature, including any provision for the extension of a maturity date, or the method of determination of such date(s); |
| ● | the rate or rates per annum (either fixed or floating, respectively) at which such debt securities will bear interest (if any) and, if floating, the method of determination of such rate; |
| ● | the date or dates from which any such interest will accrue and on which such interest will be payable and the record date or dates for the payment of such interest, or the method of determination of such date(s); |
| ● | if applicable, the provisions for subordination of such debt securities to other indebtedness of the Company; |
| ● | any redemption term or terms under which such debt securities may be defeased whether at or prior to maturity; |
| ● | any repayment or sinking fund provisions; |
| ● | any events of default applicable to such debt securities; |
| ● | whether such debt securities are to be issued in registered form or in the form of temporary or permanent global securities and the basis of exchange, transfer and ownership thereof; |
| ● | any exchange or conversion terms and any provisions for the adjustment thereof; |
| ● | if applicable, the ability of the Company to satisfy all or a portion of any redemption of such debt securities, any payment of any interest on such debt securities or any repayment of the principal owing upon the maturity of such debt securities through the issuance of securities of the Company or of any other entity, and any restriction(s) on the persons to whom such securities may be issued; and |
| ● | any other terms, conditions, rights and preferences (or limitations on such rights and preferences) including covenants and events of default which apply solely to a particular series of the debt securities being offered which do not apply generally to other debt securities, or any covenants or events of default generally applicable to the debt securities which do not apply to a particular series of the debt securities. |
The Company may include in a prospectus supplement specific terms pertaining to the debt securities that are in addition to, or in lieu of, the terms debt securities as described in this prospectus. To the extent that any particular terms of the debt securities described in a prospectus supplement differ from any of the terms of the debt securities described in this prospectus, the description of such terms set forth in this prospectus shall be deemed to have been superseded by the description of such differing terms set forth in such prospectus supplement with respect to such debt securities.
Unless otherwise specified in a prospectus supplement, the debt securities will be direct unsecured obligations of the Company and will rank pari passu (except as to sinking funds) with all other unsubordinated and unsecured indebtedness of the Company, including other debt securities issued under the debt indenture.
If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our existing securityholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
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General
This section describes the general terms that will apply to any warrants for the purchase of subordinate voting shares (“equity warrants”) or for the purchase of debt securities (“debt warrants”).
Warrants may be offered separately or together with other securities, as the case may be. Each series of warrants may be issued under a separate warrant indenture or warrant agency agreement to be entered into between the Company and one or more banks or trust companies acting as warrant agent or may be issued as stand-alone contracts. The applicable prospectus supplement will include details of the warrant agreements governing the warrants being offered. The warrant agent is expected to act solely as the agent of the Company and will not assume a relationship of agency with any holders of warrant certificates or beneficial owners of warrants. The following sets forth certain general terms and provisions of the warrants that may be offered hereunder. The specific terms of the warrants, and the extent to which the general terms described in this section apply to those warrants, will be set forth in the applicable prospectus supplement, if any.
Equity Warrants
The particular terms of each issue of equity warrants will be described in the applicable prospectus supplement. This description will include, where applicable:
| ● | the designation and aggregate number of equity warrants; |
| ● | the price at which the equity warrants will be offered; |
| ● | the currency or currencies in which the equity warrants will be offered; |
| ● | the date on which the right to exercise the equity warrants will commence and the date on which the right will expire; |
| ● | the number of subordinate voting shares that may be purchased upon exercise of each equity warrant and the price at which and currency or currencies in which the subordinate voting shares may be purchased upon exercise of each equity warrant; |
| ● | the terms of any provisions allowing or providing for adjustments in (i) the number and/or class of shares that may be purchased, (ii) the exercise price per share or (iii) the expiry of the equity warrants; |
| ● | whether the Company has applied to list the equity warrants or the underlying shares on a stock exchange; |
| ● | the designation and terms of any securities with which the equity warrants will be offered, if any, and the number of the equity warrants that will be offered with each security; |
| ● | the date or dates, if any, on or after which the equity warrants and the related securities will be transferable separately; |
| ● | whether the equity warrants will be subject to redemption or call and, if so, the terms of such redemption or call provisions; |
| ● | material income tax consequences of owning the equity warrants; |
| ● | any terms, procedures and limitations relating to the transferability, exchange or exercise of the equity warrants; and |
| ● | any other material terms or conditions of the equity warrants. |
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Debt Warrants
The particular terms of each issue of debt warrants will be described in the related prospectus supplement. This description will include, where applicable:
| ● | the designation and aggregate number of debt warrants; |
| ● | the price at which the debt warrants will be offered; |
| ● | the currency or currencies in which the debt warrants will be offered; |
| ● | the designation and terms of any securities with which the debt warrants are being offered, if any, and the number of the debt warrants that will be offered with each security; |
| ● | the date or dates, if any, on or after which the debt warrants and the related securities will be transferable separately; |
| ● | the principal amount and designation of debt securities that may be purchased upon exercise of each debt warrant and the price at which and currency or currencies in which that principal amount of debt securities may be purchased upon exercise of each debt warrant; |
| ● | the date on which the right to exercise the debt warrants will commence and the date on which the right will expire; |
| ● | the minimum or maximum amount of debt warrants that may be exercised at any one time; |
| ● | whether the debt warrants will be subject to redemption or call, and, if so, the terms of such redemption or call provisions; |
| ● | material income tax consequences of owning the debt warrants; |
| ● | whether the Company has applied to list the debt warrants or the underlying debt securities on an exchange; |
| ● | any terms, procedures and limitations relating to the transferability, exchange or exercise of the debt warrants; and |
| ● | any other material terms or conditions of the debt warrants. |
Prior to the exercise of their warrants, holders of warrants will not have any of the rights of holders of the securities subject to the warrants.
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DESCRIPTION OF SUBSCRIPTION RECEIPTS
The Company may issue subscription receipts, independently or together with other securities. Subscription receipts will be issued under one or more subscription receipt agreements.
A subscription receipt is a security of the Company that will entitle the holder to receive one or more subordinate voting shares or a combination of subordinate voting shares and warrants, upon the completion of a transaction, typically an acquisition by the Company of the assets or securities of another entity. After the offering of subscription receipts, the subscription proceeds for the subscription receipts are held in escrow by the designated escrow agent, pending the completion of the transaction. Holders of subscription receipts will not have any rights of shareholders of the Company. Holders of subscription receipts are only entitled to receive subordinate voting shares or warrants or a combination thereof upon the surrender of their subscription receipts to the escrow agent or to a return of the subscription price for the subscription receipts together with any payments in lieu of interest or other income earned on the subscription proceeds.
Selected provisions of the subscription receipts and the subscription receipt agreements are summarized below. This summary is not complete. The statements made in this prospectus relating to any subscription receipt agreement and subscription receipts to be issued thereunder are summaries of certain anticipated provisions thereof and are subject to, and are qualified in their entirety by reference to, all provisions of the applicable subscription receipt agreement.
A prospectus supplement will set forth the following terms relating to the subscription receipts being offered, if applicable:
| ● | the designation and aggregate number of subscription receipts being offered; |
| ● | the terms, conditions and procedures for which the holders of subscription receipts will become entitled to receive subordinate voting shares or warrants or a combination thereof; |
| ● | the number of subordinate voting shares or warrants or a combination thereof that may be obtained upon the conversion of each subscription receipt and the period or periods during which any conversion must occur; |
| ● | the designation and terms of any other securities with which the subscription receipts will be offered, if any, and the number of subscription receipts that will be offered with each security; |
| ● | the gross proceeds from the sale of such subscription receipts, including (if applicable) the terms applicable to the gross proceeds from the sale of such subscription receipts, plus any interest earned thereon; |
| ● | the material income tax consequences of owning, holding and disposing of such subscription receipts; |
| ● | whether such subscription receipts will be listed on any securities exchange; |
| ● | any terms, procedures and limitations relating to the transferability, exchange or conversion of the subscription receipts; and |
| ● | any other material terms and conditions of the subscription receipts. |
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DESCRIPTION OF SHARE PURCHASE CONTRACTS
The Company may issue share purchase contracts, representing contracts obligating holders to purchase from or sell to the Company a specified number of subordinate voting shares, as applicable, at a future date or dates.
The price per subordinate voting share and the number of subordinate voting shares, as applicable, may be fixed at the time the share purchase contracts are issued or may be determined by reference to a specific formula or method set forth in the share purchase contracts. The Company may issue share purchase contracts in accordance with applicable laws and in such amounts and in as many distinct series as the Company may determine.
The share purchase contracts may be issued separately or as part of units consisting of a share purchase contract and beneficial interests in debt securities, or debt obligations of third parties, including U.S. treasury securities or obligations of the subsidiaries, securing the holders’ obligations to purchase the subordinate voting shares under the share purchase contracts, which the Company refers to in this prospectus as share purchase units. The share purchase contracts may require the Company to make periodic payments to the holders of the share purchase units or vice versa, and these payments may be unsecured or refunded and may be paid on a current or on a deferred basis. The share purchase contracts may require holders to secure their obligations under those contracts in a specified manner.
Holders of share purchase contracts are not shareholders of DGXX. The particular terms and provisions of share purchase contracts offered by any prospectus supplement, and the extent to which the general terms and provisions described below may apply to them, will be described in the prospectus supplement filed in respect of such share purchase contracts. This description will include, where applicable: (i) whether the share purchase contracts obligate the holder to purchase or sell, or both purchase and sell, subordinate voting shares, as applicable, and the nature and amount of those securities, or the method of determining those amounts; (ii) any conditions upon which the purchase or sale will be contingent and the consequences if such conditions are not satisfied; (iii) whether the share purchase contracts are to be settled by delivery, or by reference or linkage to the value or performance of subordinate voting shares; (iv) any acceleration, cancellation, termination or other provisions relating to the settlement of the share purchase contracts; (v) the date or dates on which the sale or purchase must be made, if any; (vi) whether the share purchase contracts will be issued in fully registered or global form; (vii) the material income tax consequences of owning, holding and disposing of the share purchase contracts; and (viii) any other material terms and conditions of the share purchase contracts including, without limitation, transferability and adjustment terms and whether the share purchase contracts will be listed on a stock exchange.
Original purchasers of share purchase contracts will be granted a contractual right of rescission against the Company in respect of the conversion, exchange or exercise of such share purchase contract. The contractual right of rescission will entitle such original purchasers to receive the amount paid upon conversion, exchange or exercise, upon surrender of the underlying securities gained thereby, in the event that this prospectus (as supplemented or amended) contains a misrepresentation, provided that: (i) the conversion, exchange or exercise takes place within 180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this prospectus; and (ii) the right of rescission is exercised within 180 days of the date of the purchase of the convertible, exchangeable or exercisable security under this prospectus. This contractual right of rescission will be consistent with the statutory right of rescission described under section 130 of the Securities Act (Ontario) and is in addition to any other right or remedy available to original purchasers under section 130 of the Securities Act (Ontario) or otherwise at law.
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DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies or other financial institutions, as rights agent, which we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:
| ● | the date of determining the security holders entitled to the rights distribution; |
| ● | the aggregate number of rights issued and the aggregate amount of Securities purchasable upon exercise of the rights; |
| ● | the exercise price; |
| ● | the conditions to completion of the rights offering; and |
| ● | the date on which the right to exercise the rights will commence and the date on which the rights will expire. |
Each right would entitle the holder of the rights to purchase for cash the principal amount of Securities at the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
DGXX may issue units, which may consist of one or more of subordinate voting shares, warrants or any other security specified in the relevant prospectus supplement. Each unit will be issued so that the holder of the unit is also the holder of each of the securities included in the unit. In addition, the relevant prospectus supplement relating to an offering of units will describe all material terms of any units offered, including, as applicable:
| ● | the designation and aggregate number of units being offered; |
| ● | the price at which the units will be offered; |
| ● | the designation, number and terms of the securities comprising the units and any agreement governing the units; |
| ● | the date or dates, if any, on or after which the securities comprising the units will be transferable separately; |
| ● | whether the Company will apply to list the units or any of the individual securities comprising the units on any exchange; |
| ● | material Canadian income tax consequences of owning the units, including, how the purchase price paid for the units will be allocated among the securities comprising the units; and |
| ● | any other material terms or conditions of the units. |
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DIVIDEND POLICY
We do not expect to declare any dividends for the foreseeable future. We have no restrictions on paying dividends, but, if we generate earnings in the foreseeable future, we expect to retain those earnings to finance growth. Our Board of Directors will determine if and when dividends should be declared and paid in the future based upon our financial position at the relevant time. Holders of subordinate voting shares and proportionate voting shares (on an as-converted basis) are entitled to share equally in any dividends declared and paid on the subordinate voting shares and proportionate voting shares (on an as-converted basis).
CERTAIN U.S. AND CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Information regarding material Canadian and U.S. federal income tax considerations to persons investing in the securities offered by this prospectus will be set forth in an applicable prospectus supplement. You are urged to consult your own tax advisors prior to any acquisition of our securities.
We may sell the securities pursuant to this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or through underwriters or dealers, through agents and/or directly to one or more purchasers, or a combination of these methods. The securities may be distributed from time to time in one or more transactions:
| ● | at a fixed price or prices, which may be changed; |
| ● | at market prices prevailing at the time of sale; |
| ● | at prices related to such prevailing market prices; or |
| ● | at negotiated prices. |
Each time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.
Offers to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit offers to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement, to the extent appropriate.
If a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
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If an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase securities as a principal and may then resell the securities at varying prices to be determined by the dealer.
Any compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement, to the extent appropriate. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.
Any subordinate voting shares will be listed on Nasdaq and Cboe Canada, but any other securities may or may not be listed on a national securities exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
We may engage in at-the-market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the third party may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of shares and may use securities received from us in settlement of those derivatives to close out any related open borrowings of shares. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
The material terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
The underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.
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ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated under the laws of British Columbia, Canada. We have appointed Cogency Global Inc. to serve as our agent for service of process with respect to any action brought against the Company under the laws of the United States arising out of this offering or any purchase or sale of securities in connection with this offering, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon anyone affiliated with the Company who does not reside in the United States. It may also be difficult for shareholders who reside in the United States to enforce in the United States 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 U.S. investors will be able to enforce against us as well as anyone affiliated with us who resides in a country 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 U.S. 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.
Certain legal matters related to the Company’s securities offered by this prospectus will be passed upon on the Company’s behalf by MLT Aikins LLP, with respect to matters of Canadian law. Certain legal matters relating to United States law related to the Company’s securities offered by this prospectus will be passed upon on behalf of the Company by Katten Muchin Rosenman LLP. In addition, certain legal matters in connection with any offering of securities will 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, by counsel that we will name in the applicable prospectus supplement.
The consolidated financial statements of the Company as of December 31, 2025 and December 31, 2024, and for each of the two years in the period ended December 31, 2025, incorporated by reference herein have been so incorporated in reliance on the report of Davidson & Company LLP, an independent registered public accounting firm, given on their authority as experts in auditing and accounting.
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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated April 9, 2026
PROSPECTUS SUPPLEMENT
(To prospectus dated , 2026)
DIGI POWER X INC.
Up to $75,000,000 of Subordinate Voting Shares
We have entered into an amended and restated sales agreement dated April 9, 2026 (the “sales agreement”) with A.G.P./Alliance Global Partners (“A.G.P.” or the “agent”) relating to our subordinate voting shares, no par value, offered by this prospectus supplement and the accompanying prospectus from time to time, having aggregate gross proceeds of up to $75,000,000 (this “offering”) through or to the agent, acting as sales agent or principal.
Sales of our subordinate voting shares, if any, under this prospectus supplement may be made in sales deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”). The agent will make all sales using commercially reasonable efforts, consistent with its normal trading and sales practices, on terms mutually agreed upon between the agent and us.
The compensation of the agent for sales of our subordinate voting shares pursuant to the sales agreement will be in an amount of up to 3.0% of the gross sales price for all subordinate voting shares sold thereunder. In connection with the sale of the subordinate voting shares on our behalf in this offering, the agent may be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of the agent may be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to the agent with respect to certain liabilities, including liabilities under the Securities Act or the Exchange Act of 1934, as amended (the “Exchange Act”).
We are a “smaller reporting company” and an “emerging growth company” for purposes of federal securities laws and are subject to reduced public company reporting requirements. Accordingly, the information in this prospectus supplement and the accompanying prospectus may not be comparable to information provided by companies that are not smaller reporting companies or emerging growth companies.
Our subordinate voting shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “DGXX” and on Cboe Canada (“Cboe”) under the symbol “DGX.” On April 8, 2026, the last reported sale price of our subordinate voting shares on Nasdaq and Cboe was $2.40 and C$3.33, respectively.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE “RISK FACTORS” BEGINNING ON PAGE S-4 OF THIS PROSPECTUS SUPPLEMENT AND IN THE ACCOMPANYING PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS SUPPLEMENT THAT WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the prospectus to which it relates. Any representation to the contrary is a criminal offense.
Sole Sales Agent
A.G.P.
This prospectus supplement is dated , 2026.
TABLE OF CONTENTS
S-i
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and also supplements and updates information contained or incorporated by reference in the accompanying prospectus. The second part is the accompanying prospectus, which provides you with a general description of the securities we may offer from time to time, some of which does not apply to this offering. Generally, when we refer only to the prospectus, we are referring to the combined document consisting of this prospectus supplement and the accompanying prospectus, and, when we refer to the accompanying prospectus, we are referring to the base prospectus. To the extent there is an inconsistency or a conflict between the information contained in this prospectus supplement and the information contained in the accompanying prospectus or any document incorporated by reference therein filed prior to the date of this prospectus supplement, you should rely on the information in this prospectus supplement. This prospectus supplement is deemed to be incorporated by reference into the prospectus solely for purposes of this offering. Upon termination of the sales agreement with the agent, any portion of the $75,000,000 included in this prospectus supplement that is not sold pursuant to the sales agreement will be available for sale in other offerings pursuant to the prospectus and a corresponding prospectus supplement.
Owning securities may subject you to tax consequences in the U.S. and/or Canada. This prospectus supplement and the accompanying prospectus may not describe these tax consequences fully. You should read the tax discussion in this prospectus supplement and the accompanying prospectus and consult your own tax advisor with respect to your own particular circumstances.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you.
We have not, and the agent has not, authorized anyone to provide any information or to make any representations, other than those contained or incorporated by reference in this prospectus supplement and the accompanying prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the agent take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus supplement is an offer to sell only the subordinate voting shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained, or incorporated by reference, in this prospectus supplement and the accompanying prospectus, or in any free writing prospectus that we may authorize for use in connection with this offering, is accurate only as of the respective dates thereof, regardless of its time of delivery or any sale of subordinate voting shares. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read both this prospectus supplement and the accompanying prospectus (and any applicable free writing prospectuses that we may authorize for use in connection with this offering), together with any documents incorporated by reference herein and therein and the additional information described below under the heading “Where You Can Find More Information” in its entirety, before making an investment decision.
This prospectus supplement and the accompanying prospectus do not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus supplement and the accompanying prospectus in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. We are offering to sell, and seeking offers to buy, our subordinate voting shares only in jurisdictions where offers and sales are permitted. The distribution of this prospectus supplement and the accompanying prospectus and the offering of the subordinate voting shares in certain jurisdictions may be restricted by law. No action is being taken in any jurisdiction outside the United States to permit a public offering of the securities or possession or distribution of this prospectus supplement and the accompanying prospectus in that jurisdiction. Persons outside the United States who come into possession of this prospectus supplement and the accompanying prospectus must inform themselves about, and observe any restrictions relating to, the offering of our subordinate voting shares and the distribution of this prospectus supplement and the accompanying prospectus applicable to that jurisdiction.
S-ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein contain “forward-looking information” and “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and within the meaning of Canadian securities laws (collectively, “forward-looking statements”), which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this prospectus supplement and the accompanying prospectus are forward-looking statements, including any statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives and expected market growth. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include, but are not limited to:
| ● | the Company’s diversification into operating data centers may not prove to be successful; | |
| ● | the Company’s plan to develop a Tier III data center and other infrastructure projects involves significant risks, many of which are beyond the Company’s control; | |
| ● | the Company depends on significant customers for its data centers; | |
| ● | the bitcoin block reward halves approximately every four years, which reduces the number of bitcoin the Company would receive from solving blocks; | |
| ● | if the award of coins for solving blocks and transaction fees are not sufficiently high, miners (other than of the Company) may not have an adequate incentive to continue mining and may cease their mining operations, which could adversely impact the Company’s mining operations; | |
| ● | the Company relies on a third-party mining pool operator; | |
| ● | insolvency, bankruptcy or cessation of operations of a mining pool operator can have a material adverse effect on the Company; | |
| ● | the Company may be unable to obtain additional financing on acceptable terms or at all; | |
| ● | the Company may be required to sell its cryptocurrency portfolio to pay for expenses; | |
| ● | the Company’s cryptocurrency inventory may be exposed to cybersecurity threats and hacks; | |
| ● | the Company may face delays in remediating the material weaknesses identified in its internal control over financial reporting; | |
| ● | regulatory changes or actions may alter the nature of an investment in the Company or restrict the use of cryptocurrencies in a manner that adversely affects the Company’s operations; | |
| ● | recent changes in U.S. political leadership and economic policies, as well as any future policy changes, may create uncertainty that materially affects the Company’s business and financial performance; | |
| ● | the value of cryptocurrencies may be subject to momentum pricing risk; | |
| ● | cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure; | |
| ● | banks may not provide banking services, or may cut off banking services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment; | |
| ● | the impact of geopolitical events on the supply and demand for cryptocurrencies is uncertain; | |
| ● | the further development and acceptance of the cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate; | |
| ● | acceptance and/or widespread use of cryptocurrency is uncertain; | |
| ● | the Company is subject to risks associated with the Company’s need for significant electrical power; | |
S-iii
| ● | the Company’s data center and mining operations require electrical power to be available at commercially feasible rates; | |
| ● | government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations; |
| ● | the Company is exposed to hashrate and network difficulty, which could reduce the ability of the Company to remain competitive with its peers; | |
| ● | the Company’s operations, investment strategies, and profitability may be adversely affected by competition from other methods of investing in cryptocurrencies; | |
| ● | the Company’s coins may be subject to loss, theft or restriction on access; | |
| ● | incorrect or fraudulent coin transactions may be irreversible; | |
| ● | the price of coins may be affected by the sale of coins by other vehicles investing in coins or tracking cryptocurrency markets; | |
| ● | technological obsolescence and difficulty obtaining hardware may adversely impact the Company’s operating results and financial condition; | |
| ● | exposure to environmental liabilities and hazards may result in the imposition of fines, penalties and restrictions; | |
| ● | the Company’s success is largely dependent on the performance of the Company’s management and executive officers; | |
| ● | the Company may be unable to attract, develop and retain its key personal and establish adequate succession planning; | |
| ● | the Company faces competition from other data center and cryptocurrency companies; | |
| ● | uninsured or uninsurable risks could result in significant financial liabilities; | |
| ● | the Company does not currently pay cash dividends, and, therefore, the Company’s shareholders will not be able to receive a return on their subordinate voting shares unless they sell them; | |
| ● | the subordinate voting shares are subject to volatility risk and there is no guarantee that an active or liquid market will be sustained for the subordinate voting shares; | |
| ● | there are significant legal, accounting, and financial costs of being a publicly traded company which may reduce the resources available for the Company to deploy on its cryptocurrency mining operations; | |
| ● | certain directors and officers may have a conflict of interest between their duties owed to the Company and their interest in other personal or business ventures; | |
| ● | the Company may be subject to litigation; | |
| ● | the Company could lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to the Company; | |
| ● | the Company has a limited history of operations and is in the early stage of development; | |
| ● | ineffective management of growth could result in a failure to sustain the Company’s progress; | |
| ● | the Company may be subject to tax consequences which could reduce the Company’s profitability; | |
| ● | the Company may be exposed to risks from exchanging currencies, including currency exchange fees; and | |
| ● | the other risks described under the heading “Risk Factors” contained in this prospectus supplement, the accompanying prospectus and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus supplement and the accompanying prospectus. |
Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations.
The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
S-iv
This summary highlights selected information contained in more detail elsewhere in this prospectus supplement, the accompanying prospectus and in documents incorporated herein by reference. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our subordinate voting shares. For a more complete understanding of the Company, we encourage you to read and consider the more detailed information included or incorporated by reference in this prospectus supplement and the accompanying prospectus, including the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements,” and our consolidated financial statements and the accompanying notes thereto incorporated herein by reference.
Our Business
The Company is an innovative energy infrastructure company that develops cutting-edge data centers to drive the expansion of sustainable energy assets. With multiple sites, including our state-of-the-art combined cycle and high-capacity substations, we tap into and enhance the energy grid, supporting both industrial clients and broader energy markets. Our mission is to create efficient, reliable and cost-effective energy solutions by maximizing the potential of our power facilities and building advanced infrastructure to meet the demands of high-performance computing, bitcoin mining and other energy-intensive industries. Digi Power X is focused on developing, owning and operating data center facilities and delivering enterprise colocation and AI/GPU infrastructure services. The Company also owns a 60 MW gas fired power plant in North Tonawanda that currently operates as a peaker plant, providing the grid with electrical power in times of peak demand.
The Company receives digital currencies from “mining”. “Mining” is a process whereby “miners”, which are specialized computers with high amounts of computational processing power, compete to solve “blocks”, which are digital files where digital currency transactions are recorded on the blockchain. A miner that verifies and solves a new block is awarded newly-generated quantity of coins, an amount which is usually proportional to the miner’s contributed hashrate or work (plus a small transaction fee), as an incentive to invest their computer power, as mining is critical to the continuing functioning and security of the networks on which digital currencies operate.
A “Mining Pool” is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network. The Company participates in a Mining Pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula, which calculates payout primarily based on the hashrate provided by the Company to the Mining Pool as a percentage of total network hashrate of the Mining Pool, along with other inputs. The Company is entitled to consideration even if a block is not successfully placed by the Mining Pool operator. The Company transitioned its mining operations completely to Mining Pool participation in 2022, which it utilized for the years ended December 31, 2024 and 2025 and continues to use for its Bitcoin mining operations.
The Company has three facilities located in Buffalo, New York, North Tonawanda, New York and Columbiana, Alabama. The Company’s site in North Tonawanda is a 60 MW combined cycle plant with 1.2 EH of current operating hashrate. The Company’s site in Buffalo is an 18.7 MW utility powered site with an operating hashrate of 500 PH. The Company’s site in Alabama is a 22 MW utility powered site. The Company is developing its facility in Columbiana, Alabama into a 55-MW Tier 3 data center, which will be designed to support next generation AI and HPC workloads upon its completion. The Company’s facilities are strategically located in diverse geographic locations to minimize risk.
The Company was incorporated in the Province of British Columbia under the Business Corporations Act (British Columbia) (“BCBCA”) on February 18, 2017, under the name “Chortle Capital Corp.” The Company changed its name on September 18, 2017, to “HashChain Technology Inc.” Following the reverse take-over with Digihost International Inc., which closed on February 14, 2020, the Company changed its name to Digihost Technology Inc. The Company changed its name on March 6, 2025, to “Digi Power X Inc.”
Our subordinate voting shares are listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.” Our principal executive offices are located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127, and our registered office is located at 595 Howe Street - 10th Floor, Vancouver, BC V6C 2T5. Our telephone number is (818) 280-9758.
S-1
Corporate Information
Digi Power X Inc. (formerly known as Digihost Technology Inc.) is a company incorporated under the Business Corporations Act (British Columbia). The Company was originally incorporated in Canada under the Business Corporations Act (British Columbia), or the BCBCA, on February 18, 2017, under the name Chortle Capital Corp. and later changed its name to HashChain Technology Inc. (“HashChain”) on September 18, 2017. HashChain was subject to a reverse take-over (“RTO”) by Digihost International, Inc. (“Digi International”), which closed on February 14, 2020. Prior to the closing date of the RTO, the Company passed a special resolution authorizing an unlimited number of proportionate voting shares and an unlimited number of subordinate voting shares without par value. Upon closing of the RTO, HashChain filed articles of amendment to rename itself to Digihost Technology Inc. In connection with the RTO, all the issued and outstanding 6,530,560 HashChain common shares were exchanged for 6,530,560 subordinate voting shares, and all of Digi International’s common shares were exchanged for 33,412,490 subordinate voting shares and 10,000 proportionate voting shares of the Company.
In connection with and immediately prior to the closing of the RTO, Digi International entered into an agreement with Bit.Management, LLC, NYAM, LLC and BIT Mining International, LLC for the sale, transfer and assignment of 100% right, title and interest in the leasehold improvements and equipment, the transfer of the lease of property at 1001 East Delavan Ave., Buffalo, New York (the “Buffalo Mining Facility”), and transfer of a power contract for the supply of electricity at the facility. As consideration and immediately prior to the closing of the RTO, Digi International issued 104,000 Digi International common shares for an aggregate value of C$2,704,000. Digi International also entered into an agreement with BIT Mining International, LLC for the sale, transfer and assignment of 100% right, title and interest in the leasehold improvements and equipment located at the Buffalo Mining Facility. As consideration and immediately prior to the closing of the RTO, Digi International issued 60,000 Digi International common shares for an aggregate value of C$1,560,000.
The Company filed articles of amendment on March 4, 2025, changing its name from Digihost Technology Inc. to Digi Power X Inc.
Our principal place of business is located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127, and our registered office is located at 595 Howe Street – 10th Floor, Vancouver, British Columbia V6C 2T5. Our phone number is (917) 242-6549. The Company serves as its agent for service of process in Canada at its registered office located at 595 Howe Street – 10th Floor, Vancouver, British Columbia V6C 2T5. Our website address is www.digipowerx.com. The information contained on our website and available through our website is not incorporated by reference into and should not be considered a part of this prospectus, and the reference to our website in this prospectus is an inactive textual reference only.
Implications of Being an “Emerging Growth Company” and a “Smaller Reporting Company”
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies” such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies are required to adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Smaller Reporting Company
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We are eligible to, and intend to, take advantage of certain of the scaled disclosures available to smaller reporting companies.
S-2
|
Issuer |
Digi Power X Inc. | |
| Subordinate voting shares issued and outstanding as of April 8, 2026 | 69,807,449 | |
| Subordinate voting shares that may be offered by us | Subordinate voting shares having an aggregate offering price of up to $75,000,000 | |
| Subordinate voting shares to be issued and outstanding after this offering | Up to 101,057,449 subordinate voting shares, based on 69,807,449 subordinate voting shares outstanding as of April 8, 2026 and assuming sales of 31,250,000 of our subordinate voting shares in this offering at an offering price of $2.40 per share, which was the last reported sale price of our subordinate voting shares on Nasdaq on April 8, 2026. The actual number of subordinate voting shares issued will vary depending on the sale price of subordinate voting shares, if any, sold in this offering. | |
| Manner of offering | An “at the market offering” within the meaning of Rule 415(a)(4) under the Securities Act that may be made from time to time for our subordinate voting shares in the United States through or to A.G.P., as sales agent or principal. See the section of this prospectus supplement entitled “Plan of Distribution.” | |
| Use of proceeds | We intend to use the net proceeds from this offering for general corporate purposes, including funding ongoing operations and/or working capital requirements, completing construction on the Company’s Tier III data center facilities, repaying indebtedness outstanding from time to time, and completing potential acquisitions to expand power infrastructure capacity and build out its planned AI and HPC network. See the section of this prospectus supplement titled “Use of Proceeds.” | |
| Market for our subordinate voting shares | Our subordinate voting shares are listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.” | |
| Risk factors | Investing in our subordinate voting shares involves a high degree of risk. See the section titled “Risk Factors” and the other information included in or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of factors you should consider carefully before deciding to invest in our subordinate voting shares. |
Unless otherwise stated, all information in this prospectus is based on 69,807,499 subordinate voting shares outstanding as of April 8, 2026 and does not include the following as of that date:
| ● | 2,850,130 subordinate voting shares issuable upon outstanding options, with a weighted average exercise price of $3.59; |
| ● | 1,744,374 subordinate voting shares issuable upon exercise of outstanding warrants issued in previous offerings (other than the Warrants), with a weighted average exercise price of $3.03; and |
| ● | 2,954,279 subordinate voting shares reserved for issuance upon the vesting of restricted share units of the Company. |
See “Description of Share Capital” for additional information.
S-3
Investing in our subordinate voting shares involves a high degree of risk. Before you make an investment decision with respect to our subordinate voting shares, you should consider carefully the risks described below and discussed under the section captioned “Risk Factors” contained in our most recent annual report on Form 10-K, which is incorporated by reference in this prospectus supplement, and other information included in any document that we file from time to time with the SEC after the date of this prospectus supplement that is incorporated by reference herein, as well as other information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus. If any of the following events or any of the events described in any such other document actually occur, our business, operating results, prospects or financial condition could be materially and adversely affected. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business and operations.
Our management will have broad discretion over the use of proceeds we receive from this offering and may use them in ways with which you do not agree and in ways that may not enhance our operating results or the market price of our subordinate voting shares.
Our management will have broad discretion over the use of the net proceeds that we receive this offering. We may spend or invest those net proceeds in ways with which our shareholders disagree or that do not yield a favorable return. We intend to use the net proceeds from this offering as described in “Use of Proceeds.” However, our use of any such proceeds may differ substantially from our current plans. Failure by our management to apply these funds effectively could harm our business, results of operations, cash flows, financial condition and/or prospects. Pending use, we may invest the net proceeds from the offering in a manner that does not produce income or that loses value.
There is no certainty regarding the net proceeds to the Company from this offering.
There is no certainty that any subordinate voting shares will be sold in this offering or that gross proceeds of $75,000,000 will be raised in this offering. The agent has agreed to use its commercially reasonable efforts to sell, on the Company’s behalf, subordinate voting shares having an aggregate value of up to $75,000,000 as designated by the Company, but the Company is not required to request the sale of the maximum amount offered or any amount. If the Company requests a sale, the agent is not obligated to purchase any unsold subordinate voting shares as principal. As a result of this offering being made on a commercially reasonable efforts basis with no minimum, and only as requested by the Company, the Company may raise substantially less than the maximum total offering amount or nothing at all.
The actual number of subordinate voting shares we may issue under the sales agreement, at any one time or in total, is uncertain.
Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the agent at any time throughout the term of the sales agreement. The number of shares that are sold by the agent after delivering a placement notice will fluctuate based on the market price of our subordinate voting shares during the sales period and limits we set with the agent. Because the price per subordinate voting share of each share sold will fluctuate based on the market price of our subordinate voting shares during the sales period, it is not possible at this stage to predict the number of subordinate voting shares that will ultimately be issued.
Investors are likely to pay different prices for subordinate voting shares sold, if any, in this offering.
Investors who purchase subordinate voting shares in this offering at different times will likely pay different prices, and so may experience different outcomes in their investment results. The Company will have discretion, subject to market demand, to vary the timing, prices and numbers of subordinate voting shares sold in this offering, and there is no minimum or maximum sales price for such shares. Investors may experience a decline in the value of their subordinate voting shares as a result of subsequent sales that are made at prices lower than the prices they paid or for other reasons. Moreover, if the prevailing market price for the subordinate voting shares declines, then the Company will be able to issue more subordinate voting shares in this offering, and investors may suffer greater dilution.
Existing and future investors in our subordinate voting shares may experience significant dilution.
The number of subordinate voting shares that the Company is authorized to issue under its articles of association is unlimited. The Company may, in its sole discretion, as part of future offerings, issue additional subordinate voting shares and/or securities convertible into or exercisable for subordinate voting shares from time to time, subject to the rules of any applicable stock exchange on which the subordinate voting shares are then listed and applicable securities law. The issuance of any additional subordinate voting shares and/or securities convertible into or exercisable for subordinate voting shares may have a dilutive effect on the interests of holders of the Company’s subordinate voting shares. Further, if proceeds of this offering are used to pay down any then-existing indebtedness, this offering may result in substantial dilution on a per subordinate voting share basis to the Company’s net income and certain other financial measures used by the Company, which may result in the reduction of value and proportional voting power of each subordinate voting share.
S-4
Return on investors’ investment in the subordinate voting shares is not guaranteed.
There can be no assurance regarding the amount of income to be generated by the Company. The subordinate voting 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 a fixed amount or any amount at all, or to return the initial purchase price of the subordinate voting shares on any date in the future, and the Company has never declared, and does not have any current expectation that it will declare, a dividend payable to holders of its subordinate voting shares. The market value of the subordinate voting shares may decline if the Company is unable to generate sufficient positive returns, and any such decline may be significant, which could result in the loss of some or all of a purchaser’s investment in the subordinate voting shares. Consequently, purchasers must rely on sales of their subordinate voting shares after price appreciation, which may never occur, as the only way to realize any future gains on their investments. There is no guarantee that our subordinate voting shares will appreciate in value or even maintain the price at which they were purchased.
We will require additional capital funding, the receipt of which may impair the value of our subordinate voting shares.
Our future capital requirements depend on many factors. We currently expect that we will need to raise additional capital through public or private equity or debt offerings or through arrangements with strategic partners or other sources in order to continue our operations. There can be no assurance that additional capital will be available when needed or on terms satisfactory to us, if at all. To the extent we raise additional capital by issuing equity securities, our shareholders may experience substantial dilution, and any newly-issued equity securities may have greater rights, preferences or privileges than our existing subordinate voting shares.
The trading price and trading volume of our subordinate voting shares is volatile.
In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the securities of many companies have experienced wide fluctuations in market price that have not necessarily been related to the operating performance, underlying asset values or prospects for such companies. There can be no assurance that continual fluctuations in price will not occur, and the trading price of our subordinate voting shares may be subject to large fluctuations and may decline below the price at which an investor acquired its subordinate voting shares. The trading price of our subordinate voting shares may increase or decrease in response to a number of events and factors, many of which may not be within the Company’s control and which may not be a reflection of the Company’s actual operating performance, underlying asset values or prospects. If a shareholder sells its subordinate voting shares, the price received may be more or less than the original investment. The subordinate voting shares may trade at a discount from their book value.
If a United States shareholder is treated as owning at least 10% of the subordinate voting shares, such holder may be subject to adverse U.S. federal income tax consequences.
If a United States person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our subordinate voting shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group. A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of “Subpart F income,” “net CFC tested income,” and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. We are not currently a controlled foreign corporation but cannot provide assurance that we will not become a controlled foreign corporation as a result of future changes in the composition of our shareholders. A United States investor should consult its advisors regarding the potential application of these rules to an investment in our subordinate voting shares.
S-5
If the Company is characterized as a passive foreign investment company, U.S. shareholders may suffer adverse consequences.
Generally, if for any taxable year 75% or more of our gross income is passive income, or at least 50% of the average quarterly value of our assets are held for the production of, or produce, passive income, we would be characterized as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes. Once treated as a PFIC for any taxable year, we would generally continue to be treated as a PFIC for all subsequent taxable years for any U.S. shareholder who owned subordinate voting shares when we were treated as a PFIC. If we were to be a PFIC, and a U.S. shareholder does not make a “mark-to-market” election, “excess distributions” to such U.S. shareholder, and any gain recognized by such U.S. shareholder on a disposition of our subordinate voting shares, would be taxed in an unfavorable way. Among other consequences, our dividends, to the extent that they constituted excess distributions, would be taxed at the regular rates applicable to ordinary income, rather than the 20% maximum rate applicable to certain dividends received by an individual from a qualified foreign corporation, and certain “interest” charges may apply. In addition, gains on the sale of our subordinate voting shares would be treated in the same way as excess distributions. If we were classified as a PFIC, a U.S. shareholder of our subordinate voting shares could suffer adverse U.S. federal income tax consequences, including the treatment of gain realized on the sale of such shares as ordinary income rather than as capital gain and the loss of the preferential income tax rate applicable to dividends (if any) received on the subordinate voting shares by a non-corporate U.S. shareholder. Additionally, a U.S. shareholder would (unless such shareholder made a timely “mark to market” or “qualified electing fund” election) be taxable on gain recognized on a disposition of the subordinate voting shares and upon receipt of certain “excess distributions” (generally, distributions that exceed 125% of the average amount of distributions in respect of the subordinate voting shares received during the preceding three taxable years or, if shorter, during the U.S. shareholder’s holding period prior to the distribution year) as if such income had been recognized ratably over the U.S. shareholder’s holding period. Tax would be computed on such income at the highest ordinary income tax rate in effect for each taxable year to which income is allocated, and an interest charge on the tax as so computed would also apply.
The tests for determining PFIC status are applied annually. We currently do not expect to be a PFIC for our current and future taxable years. However, because our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time and can only be made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable years.
The Company may issue and sell subordinate voting shares having aggregate gross sales proceeds of up to $75,000,000 from time to time, before deducting sales agent commissions and expenses. The net proceeds from this offering, if any, are not determinable in light of the nature of the distribution. There can be no assurance that we will be able to sell any subordinate voting shares under, or fully utilize, the sales agreement with the agent. The net proceeds of any given distribution of subordinate voting shares through the agent in an “at-the-market distribution” or “at-the-market” offering will represent the gross proceeds after deducting the applicable compensation payable to the agent under the sales agreement and the expenses of the distribution. The proceeds actually received by the Company will depend on the number of subordinate voting shares actually sold and the offering price of such subordinate voting shares. See “Plan of Distribution.”
The net proceeds from this offering, to the extent raised, are expected to be used by the Company primarily for general corporate purposes, including funding ongoing operations and/or working capital requirements, completing construction on the Company’s Tier III data center facilities, repaying indebtedness outstanding from time to time, and completing potential acquisitions to expand power infrastructure capacity and build out its planned AI and HPC network.
Although the Company intends to apply the net proceeds from this offering as described above, there may be circumstances where, for business reasons, a reallocation of funds may be deemed prudent or necessary, and the ultimate use of proceeds from this offering may vary materially from that set forth above. For example, the operations of the Company may continue to be adversely impacted by international supply chain disruptions, which have already reduced the availability of and affected the timing of delivery of mining equipment. Further, when mining equipment does become available, the Company anticipates that it may be subject to increased equipment costs and increased shipping costs. Accordingly, those and other factors may result in management of the Company exercising discretion in applying the net proceeds from the sale of any subordinate voting shares pursuant to the sales agreement. See “Risk Factors.”
S-6
General
The following is a summary of the material terms of our share capital, as set forth in our articles of association, and certain related sections of the BCBCA. The following summary is subject to, and is qualified in its entirety by reference to, the provisions of our articles of association and the applicable provisions of the BCBCA. A copy of our articles of association is filed as an exhibit to the registration statement of which this prospectus is a part.
Share Capital
Our authorized share capital consists of:
| ● | unlimited subordinate voting shares, no par value; and |
| ● | unlimited proportionate voting shares, no par value. |
As of April 8, 2026, there were 69,807,449 subordinate voting shares and 3,333 proportionate voting shares issued and outstanding. Proportionate voting shares are not available for distribution to the public. Proportionate voting shares may be converted at the holder’s option into subordinate voting shares at a ratio of 200 subordinate voting shares for every 1 proportionate voting share.
In addition, as of the date of this prospectus, there were: (i) 2,850,130 subordinate voting shares issuable upon the exercise of outstanding options at a weighted average exercise price of $3.59; (ii) 1,744,374 subordinate voting shares reserved for issuance on exercise of 1,744,374 issued and outstanding warrants of the Company with a weighted average exercise price of $3.03; and (iii) 2,954,279 subordinate voting shares reserved for issuance upon the vesting of 2,954,279 restricted share units, for a total of 77,356,232 subordinate voting shares on a fully diluted basis (including 666,600 subordinate voting shares issuable upon conversion of the 3,333 issued and outstanding proportionate voting shares as of such date).
Subordinate Voting Shares
Each holder of subordinate voting shares is entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of subordinate voting shares are entitled to one vote per subordinate voting share on all matters subject to shareholder vote, voting together as a single class with holders of proportionate voting shares, except as otherwise prohibited by law.
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 will be entitled to participate ratably along with all other holders of subordinate voting shares and proportionate voting shares (on an as-converted to subordinate voting share basis).
The holders of the subordinate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu as to dividends and any declaration or payment of any dividend on the subordinate voting shares.
Except as otherwise provided in this prospectus, the subordinate voting shares and proportionate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA. Our subordinate voting shares are not subject to any pre-emptive rights, conversion or exchange rights, redemption, retraction, purchase for cancellation or surrender provisions, sinking or purchase fund provisions, provisions permitting or restricting the issuance of additional securities or provisions requiring a shareholder to contribute additional capital.
S-7
Proportionate Voting Shares
Holders of proportionate voting shares are entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of proportionate voting shares are entitled to one vote in respect of each subordinate voting share into which such proportionate voting share could ultimately then be converted, which for greater certainty, shall be equal to 200 votes per proportionate voting share, on all matters subject to shareholder vote, voting together as a single class with holders of subordinate voting shares, except as otherwise prohibited by law.
Holders of proportionate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu (on an as-converted basis, assuming conversion of all proportionate voting shares into subordinate voting shares at the conversion ratio of 200:1) as to dividends and any declaration or payment of any dividend on the subordinate voting shares. No dividend will be declared or paid on the proportionate voting shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted basis) on the subordinate voting shares.
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 proportionate voting shares will be entitled to participate ratably along with all other holders of proportionate voting shares (on an as-converted to resulting issuer subordinate voting share basis) and subordinate voting shares.
Each proportionate voting share is convertible, at the option of the holder thereof at any time after the date of issuance of such share, into fully paid and non-assessable subordinate voting shares as is determined by multiplying the number of proportionate voting shares by the 200. Proportionate voting shares are not available for distribution to the public.
Except as otherwise described in this prospectus, the proportionate voting shares and subordinate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA.
Anti-Takeover Provisions
Some provisions of the BCBCA and other British Columbia laws could make the following transactions more difficult: an acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that shareholders may otherwise consider to be in their best interests or in our best interests, including transactions that provide for payment of a premium over the market price for our subordinate voting shares.
Listing
Our subordinate voting shares are currently listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.”
Transfer Agent and Registrar
The transfer agent and registrar for our subordinate voting shares is Marrelli Trust Company Limited, 620 – 1111 Melville St., Vancouver, British Columbia, V6E 3V6.
DIVIDEND POLICY
We do not expect to declare any dividends for the foreseeable future. We have no restrictions on paying dividends, but, if we generate earnings in the foreseeable future, we expect to retain those earnings to finance growth. Our Board of Directors will determine if and when dividends should be declared and paid in the future based upon our financial position at the relevant time. Holders of subordinate voting shares and proportionate voting shares (on an as-converted basis) are entitled to share equally in any dividends declared and paid on the subordinate voting shares and proportionate voting shares (on an as-converted basis).
S-8
We have entered into the sales agreement with the agent pursuant to which we may offer and sell subordinate voting shares having an aggregate sales price of up to $75,000,000 from time to time through or to the agent acting as a sales agent or principal. The agent is not required to sell any specific number or dollar amount of subordinate voting shares but will use its commercially reasonable efforts, consistent with its normal sales and trading practices, to sell the subordinate voting shares under the terms and conditions of the sales agreement.
Sales of subordinate voting shares, if any, under this prospectus supplement and the accompanying prospectus will be made by any method that is deemed to be an “at-the-market distribution” or an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act, including, without limitation, sales made directly on Nasdaq or other existing trading markets for the subordinate voting shares in the United States. If the Company and the agent agree on any method of distribution other than sales of subordinate voting shares on or through the Nasdaq or another existing trading market in the United States at market prices, we will file a further prospectus supplement providing all information about such offering as required by Rule 424(b) under the Securities Act.
The sales, if any, of subordinate voting shares made under the sales agreement will be made by means of ordinary brokers’ transactions on Nasdaq or another existing trading market in the United States at market prices, or as otherwise agreed upon by us and the agent. No subordinate voting shares will be offered or sold in Canada, on Cboe or on any other trading market in Canada. Neither the Company nor the agent will undertake any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of the sale of the subordinate voting shares in Canada, undertake an offer or sale of any of the subordinate voting shares to a person that it knows or has reason to believe is in Canada or has been pre-arranged with a buyer in Canada, or to any person who it knows or has reason to believe is acting on the behalf of persons in Canada or to any person whom it knows or has reason to believe intends to reoffer, resell or deliver the subordinate voting shares in Canada on Cboe or on other trading markets in Canada or to any persons in Canada or acting on behalf of persons in Canada. In this offering, prices at which the subordinate voting shares are sold, if any, may vary as between purchasers during the period of distribution. The agent will not engage in any transactions that stabilize the price of the subordinate voting shares.
We will designate the maximum number or amount of subordinate voting shares to be sold through the agent on a daily basis or otherwise as we and the agent agree and the minimum price per subordinate voting share at which such subordinate voting shares may be sold. Subject to the terms and conditions of the sales agreement, the agent will use reasonable efforts to sell on our behalf the maximum number or amount of subordinate voting shares so designated. We may instruct the agent not to sell any subordinate voting shares if the sales cannot be effected at or above the minimum price designated by us in any such instruction. We or the agent, may suspend the offering of the subordinate voting shares at any time and from time to time by notifying the other parties.
We have the right to terminate the provisions of the sales agreement relating to solicitations of offers to purchase subordinate voting shares in our sole discretion by giving written notice to the agent as specified in the sales agreement, and the agent has the right to terminate the provisions of the sales agreement relating to solicitations of offers to purchase subordinate voting shares by giving written notice as specified in the sales agreement.
The agent has agreed in the sales agreement to provide to us with written confirmation following the close of trading on Nasdaq on each day in which subordinate voting shares are sold under the sales agreement. Each confirmation will include the number of subordinate voting shares sold on that day, the gross sales proceeds and the net proceeds to the Company. We will report at least quarterly the number of subordinate voting shares sold through the agent under the sales agreement, the net proceeds to us and the sales agent commissions payable to the agent in connection with the sales of the subordinate voting shares.
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We will pay the agent a commission of up to 3.0% of the gross sales price per subordinate voting share sold through the agent as our agent under the sales agreement. Because there is no minimum offering amount required as a condition to this offering, the actual total public offering amount, the commissions payable to the sales agent and the proceeds to us, if any, are not determinable at this time. We have agreed to reimburse the agent for certain of its reasonable and documented out-of-pocket costs and expenses (including but not limited to the reasonable fees and documented out-of-pocket costs and expenses of counsel to the agent) in an amount not to exceed $60,000. Additionally, pursuant to the terms of the sales agreement, we agreed to reimburse the agent up to an additional $2,500 per calendar quarter hereafter (and on an annual basis in an amount not to exceed $10,000) and up to an additional $10,000 for each additional program “refresh” (filing of a new registration statement, prospectus, or prospectus supplement relating to the subordinate voting shares and/or an amendment of the sales agreement). All expenses relating to this offering and any compensation paid to the agent will be paid out of the proceeds from the sale of subordinate voting shares, unless otherwise stated in the sales agreement. We estimate that the total expenses for this offering, excluding compensation payable to A.G.P. and certain expenses reimbursable to A.G.P. under the terms of the sales agreement, will be approximately $120,000. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such subordinate voting shares pursuant to this offering.
Settlement for sales of subordinate voting shares will occur, unless the parties agree otherwise, on the first trading day following the date on which any sales were made in return for payment of the net proceeds to the Company. There is no arrangement for funds to be received in an escrow, trust or similar arrangement. Sales of subordinate voting shares will be settled through the facilities of The Depository Trust Company or by such other means as the Company and the agent may agree upon.
The agent is not registered as a dealer in any Canadian jurisdiction and, accordingly, is not permitted to and will not, directly or indirectly, advertise or solicit offers to purchase any of the subordinate voting shares in Canada.
The offering of subordinate voting shares pursuant to the sales agreement will terminate upon the earliest of (i) the sale of all subordinate voting shares subject to the sales agreement and (ii) termination of the sales agreement as permitted therein.
In connection with the sale of the subordinate voting shares on our behalf, the agent may be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation paid to the agent may be deemed to be underwriting commissions or discounts. The agent will not engage in any market making activities involving our subordinate voting shares while this offering is ongoing under this prospectus supplement if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Securities Act.
We have agreed to provide indemnification and contribution to the agent against certain liabilities, including liabilities under the Securities Act and Exchange Act, and to contribute to payments that the agent may be required to make in respect of such liabilities. The agent will not engage in any transactions to stabilize the price of the subordinate voting shares. No underwriter or dealer involved in the distribution, no affiliate of such an underwriter or dealer and no person or company acting jointly or in concert with such an underwriter or dealer has over-allotted, or will over-allot, subordinate voting shares in connection with the distribution or effect any other transactions that are intended to stabilize or maintain the market price of the subordinate voting shares.
The agent and/or its affiliates have in the past engaged, and may in the future, engage in transactions with, and may perform, from time to time, investment banking and advisory services for the Company in the ordinary course of their business and for which it would receive customary fees and expenses. In addition, in the ordinary course of its business activities, the agent and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for its own account and for the accounts of its customers. Such investments and securities activities may involve securities and/or instruments of the Company or its affiliates.
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The subordinate voting shares will be listed for trading on the Nasdaq under the trading symbol “DGXX” and on Cboe under the trading symbol “DGX.”
This summary of the material provisions of the sales agreement does not purport to be a complete statement of its terms and conditions. A copy of the sales agreement is filed as an exhibit to the Company’s registration statement on Form S-3 of which this prospectus supplement forms a part and is incorporated by reference herein.
This prospectus supplement and the accompanying prospectus in electronic format may be made available on a website maintained by the sales agent, and the sales agent may distribute this prospectus supplement and the accompanying prospectus supplement electronically.
Other Relationships
The sales agent and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees. In addition, in the ordinary course of its various business activities, the sales agent and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The sales agent or its affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions Outside of the United States
Other than in the United States, no action has been taken by the Company that would permit a public offering of the subordinate voting shares being offered hereby in any jurisdiction outside the United States where action for that purpose is required. The subordinate voting shares may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering material or advertisements in connection with the offer and sale of any such subordinate voting shares be distributed or published, in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus supplement comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus supplement. This prospectus supplement does not constitute an offer to sell or a solicitation of an offer to buy any subordinate voting shares pursuant to the sales agreement in any jurisdiction in which such an offer or a solicitation is unlawful.
CERTAIN U.S. AND CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Certain U.S. Federal Income Tax Considerations
The following discussion describes certain U.S. federal income tax considerations for U.S. Holders (as defined below) of an investment in the subordinate voting shares acquired pursuant to the offering. The effects of any applicable state or local laws, or other U.S. federal tax laws such as estate and gift tax laws, or the Medicare contribution tax on net investment income or the alternative minimum tax, are not discussed. This discussion applies only to investors who acquire and hold the subordinate voting shares as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment), and who have the U.S. Dollar as their functional currency. This discussion is based on the Code, U.S. Treasury regulations promulgated thereunder, judicial decisions, published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), all as in effect as of the date of this prospectus supplement. All of the foregoing authorities are subject to change, which change could apply retroactively and could adversely affect the tax consequences described below.
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The following discussion does not address all U.S. federal income tax considerations relevant to a holder’s particular circumstances or to holders subject to particular rules, including, without limitation:
| o | U.S. expatriates and certain former citizens or long-term residents of the United States; |
| o | persons whose functional currency is not the U.S. Dollar; |
| o | persons holding the subordinate voting shares as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
| o | banks, insurance companies and other financial institutions; |
| o | real estate investment trusts or regulated investment companies; |
| o | brokers, dealers or traders in securities, commodities or currencies; |
| o | S corporations or entities or arrangements treated as partnerships for U.S. federal income tax purposes; |
| o | tax-exempt organizations or governmental organizations; |
| o | individual retirement accounts or other tax deferred accounts; |
| o | persons who acquired the subordinate voting shares pursuant to the exercise of any employee share option or otherwise as compensation; |
| o | persons that own or are deemed to own 10% or more of the Company’s stock by vote or value directly, indirectly or constructively; |
| o | persons subject to special tax accounting rules as a result of any item of gross income with respect to the subordinate voting shares being taken into account in an applicable financial statement; |
| o | persons that hold subordinate voting shares through a permanent establishment or fixed base outside the United States; and |
| o | persons deemed to sell subordinate voting shares under the constructive sale provisions of the Code. |
U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE U.S. STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SUBORDINATE VOTING SHARES.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of subordinate voting shares that, for U.S. federal income tax purposes, is or is treated as any of the following:
| o | an individual who is a citizen or resident of the United States; |
| o | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
| o | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
| o | a trust that (1) is subject to the supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
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If an investor is an entity taxable as a partnership for U.S. federal income tax purposes, such investor’s tax treatment generally will depend on the activities of the partnership. Partnerships holding subordinate voting shares and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences applicable to them.
Taxation of Dividends and Other Distributions on the Subordinate Voting Shares
The discussion in this section is subject to the discussion below regarding PFICs.
The gross amount of any distribution to a U.S. Holder with respect to the subordinate voting shares, including any non-U.S. taxes withheld from the amount paid, will be included in such U.S. Holder’s gross income as dividend income when actually or constructively received to the extent that the distribution is paid out of the Company’s current or accumulated earnings and profits (as determined applying U.S. federal income tax principles). To the extent the amount of the distribution exceeds the Company’s current and accumulated earnings and profits, it will be treated first as a return of a U.S. Holder’s tax basis in the subordinate voting shares, and to the extent the amount of the distribution exceeds the tax basis, as capital gain. The Company does not intend to calculate its earnings and profits applying U.S. federal income tax principles. Therefore, a U.S. Holder should expect that distributions will generally be reported as ordinary dividend income. Dividends paid by the Company will not be eligible for the dividends-received deduction available to corporations in respect of dividends received from U.S. corporations.
Subject to certain holding period and other limitations, dividends paid on the subordinate voting shares to certain non-corporate U.S. Holders may be “qualified dividend income” taxable for regular U.S. federal income tax purposes at preferential tax rates. Non-corporate U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends.
Dividends will be includible in the income of a U.S. Holder in a U.S. Dollar amount calculated by reference to the exchange rate on the day the distribution is received. A U.S. Holder that receives a foreign currency distribution and converts the foreign currency into U.S. Dollars subsequent to receipt may have foreign exchange gain or loss based on any appreciation or depreciation in the value of the foreign currency against the U.S. Dollar, which will generally be U.S.-source ordinary income or loss. A loss might not be deductible due to certain limitations.
Dividends will generally constitute foreign source income for foreign tax credit limitation purposes. Any tax withheld with respect to distributions on the subordinate voting shares may, subject to a number of complex limitations, be claimed as a foreign tax credit against such U.S. Holder’s U.S. federal income tax liability or may be claimed as a deduction for U.S. federal income tax purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends generally will constitute “passive category income”. The rules with respect to the foreign tax credit are complex and may depend upon a U.S. Holder’s particular circumstances. U.S. Holders should consult their tax advisor regarding the availability of the foreign tax credit under their particular circumstances.
Taxation of Disposition of the Subordinate Voting Shares
The discussion in this section is subject to the discussion below regarding PFICs.
A U.S. Holder will recognize gain or loss on any sale, exchange or other taxable disposition of the subordinate voting shares equal to the difference between the amount realized (in U.S. Dollars) on the disposition and such holder’s tax basis (in U.S. Dollars) in the subordinate voting shares. Any such gain or loss will be capital gain or loss, and generally will be long-term capital gain or loss if such U.S. Holder has held the subordinate voting shares for more than one year at the time of the disposition. Otherwise, such gain or loss generally will be short-term capital gain or loss. Long-term capital gain recognized by certain non-corporate U.S. Holders, including individuals, generally will be taxable at reduced rates. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S.- source income or loss for foreign tax credit limitation purposes. U.S. Holders should consult their tax advisors regarding the proper treatment of gain or loss in their particular circumstances.
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Passive Foreign Investment Company
As a non-United States corporation, the Company will be a passive foreign investment company, or “PFIC”, for U.S. federal income tax purposes for any taxable year if, after applying certain look-through rules with respect to subsidiaries in which the Company owns at least 25% (by vote or value) of the stock, either:
| o | at least 75% of its gross income for such taxable year is passive income, or |
| o | at least 50% of the total value of its assets (generally based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. |
The Company believes it was not a PFIC for the year ended December 31, 2025. Based on the market price of the subordinate voting shares and the composition of the Company’s income and assets, including goodwill, the Company also does not expect to be treated as a PFIC for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that must be made annually after the close of each taxable year, and is dependent on a number of factors, including the value of the Company’s passive assets, the amount and type of the Company’s gross income and the market price of the subordinate voting shares, which could fluctuate significantly. Therefore, there can be no assurance that the Company will not be a PFIC for the current or future taxable years.
If the Company is a PFIC for any taxable year during a U.S. Holder’s holding period for the subordinate voting shares, it generally will continue to be treated as a PFIC with respect to such holder’s investment in the subordinate voting shares for all succeeding years during which such holder holds the subordinate voting shares. In that event, a U.S. Holder would (unless it made one of the elections discussed below on a timely basis) be taxable on gain recognized on a disposition of the subordinate voting shares and upon receipt of certain “excess distributions” (generally, distributions that exceed 125% of the average amount of distributions in respect of the subordinate voting shares received during the preceding three taxable years or, if shorter, during the U.S. Holder’s holding period prior to the distribution year) as if such income had been recognized ratably over the U.S. Holder’s holding period. Tax would be computed on such income at the highest ordinary income tax rate in effect for each taxable year to which income is allocated, and an interest charge on the tax as so computed would also apply.
A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If a U.S. Holder makes a valid mark-to-market election for the subordinate voting shares, such holder will include in income for each year that the Company is treated as a PFIC, an amount equal to the excess, if any, of the fair market value of the subordinate voting shares as of the close of such holder’s taxable year over the holder’s adjusted basis in the subordinate voting shares. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the subordinate voting shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the subordinate voting shares, as well as to any loss realized on the actual sale or disposition of the subordinate voting shares, in each case to the extent the amount of such loss does not exceed the net mark-to-market gains for the subordinate voting shares previously included in income. A U.S. Holder’s basis in the subordinate voting shares will be adjusted to reflect any such income or loss amounts.
The mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations, other than in de minimis quantities, on at least 15 days during each calendar quarter. The subordinate voting shares are listed on Nasdaq, which is a qualified exchange. Because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs the Company owns, a U.S. Holder generally will continue to be subject to the PFIC rules with respect to such holder’s indirect interest in any investments held by the Company that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. The Company currently does not have any non-U.S. subsidiaries.
U.S. Holders should consult their tax advisor as to the availability and desirability of a mark-to-market election.
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As an alternative to the tax treatment described above, a U.S. Holder could elect to treat the Company as a “qualified electing fund” (a “QEF”), in which case the U.S. Holder would be taxed currently, for each taxable year that the Company is a PFIC, on its pro rata share of the Company’s ordinary earnings and net capital gain (subject to a separate election to defer payment of taxes, which deferral is subject to an interest charge). Special rules apply if a U.S. Holder makes a QEF election after the first taxable year of its holding period in which the Company is a PFIC. In the event that the Company concludes that it will be classified as a PFIC, the Company will also determine at that time whether it will provide U.S. Holders with the information that is necessary to make a QEF election. Amounts includable in income as a result of a QEF election will be determined without regard to the Company’s prior year losses or the amount of cash distributions, if any, received from the Company. A U.S. Holder’s basis in its subordinate voting shares will increase by any amount included in income and decrease by any distributions of amounts previously taxed under the QEF rules.
If the Company is a PFIC for any taxable year during which a U.S. Holder owns subordinate voting shares, it generally will continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years even if it ceases to meet the requirements for PFIC status. Notwithstanding any election made with respect to the subordinate voting shares, if the Company is a PFIC in either the taxable year of the distribution or the preceding taxable year, dividends received with respect to the subordinate voting shares will not qualify as “qualified dividends” eligible for taxation at reduced federal income tax rates.
A U.S. Holder of a PFIC is required to file an IRS Form 8621. U.S. Holders are urged to consult their tax advisors regarding the potential application of the PFIC rules to an investment in the subordinate voting shares.
Information Reporting and Backup Withholding
Dividend payments with respect to the subordinate voting shares and proceeds from the sale, exchange or other disposition of the subordinate voting shares may be subject to information reporting to the IRS and U.S. backup withholding. Certain U.S. Holders are exempt from backup withholding, including corporations and certain tax-exempt organizations. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and such holder:
| 1. | fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
| 2. | furnishes an incorrect taxpayer identification number; |
| 3. | is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
| 4. | fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
Additional Reporting Requirements
Certain U.S. Holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include the subordinate voting shares) are required to report information relating to such assets, subject to certain exceptions (including an exception for subordinate voting shares held in accounts maintained by certain financial institutions). Penalties can apply if U.S. Holders fail to comply with such reporting requirements. U.S. Holders should consult their tax advisors regarding the applicability of these requirements to their acquisition and ownership of subordinate voting shares.
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THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE SUBORDINATE VOTING SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
Certain Canadian Federal Income Tax Consequences
The following summary describes, as of the date hereof, the principal Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations thereunder (the “Tax Act”), generally applicable to a holder who acquires, as beneficial owner, subordinate voting shares pursuant to the offering, and who, for the purposes of the Tax Act and at all relevant times, holds subordinate voting shares as capital property and deals at arm’s length and is not affiliated with the Company, the agent and any subsequent purchaser of such securities. A holder who meets all of the foregoing requirements is referred to as a “Holder” herein, and this summary only addresses such Holders. Generally, subordinate voting shares will be considered to be capital property to a Holder, provided the Holder does not hold subordinate voting shares in the course of carrying on a business of trading or dealing in securities and has not acquired the subordinate voting shares in one or more transactions considered to be an adventure or concern in the nature of trade.
This summary is not applicable to a holder (i) that is a “financial institution”, as defined in the Tax Act for the purposes of the mark-to-market rules in the Tax Act, (ii) that is a “specified financial institution”, as defined in the Tax Act, (iii) of an interest which is a “tax shelter investment” as defined in the Tax Act, (iv) that has elected to determine its Canadian tax results in a “functional currency” other than the Canadian dollar, (v) that has entered into or will enter into a “derivative forward agreement” or a “synthetic disposition arrangement” with respect to the subordinate voting shares, or (vi) that receives dividends on subordinate voting shares under or as part of a “dividend rental arrangement”, as defined in the Tax Act. Any such holder should consult its own tax advisor with respect to an investment in subordinate voting shares.
Additional considerations, not discussed herein, may be applicable to a Holder that is a corporation resident in Canada and is (or does not deal at arm’s length with a corporation resident in Canada for purposes of the Tax Act that is), or becomes, controlled by a non-resident person or a group of non-resident persons (comprised of any combination of non-resident corporations, non-resident individuals or non-resident trusts) for purposes of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act. Such Holders should consult their tax advisors with respect to the consequences of acquiring subordinate voting shares.
This summary is based upon the provisions of the Tax Act and the regulations thereunder in force as of the date hereof, all specific proposals to amend the Tax Act and the regulations thereunder that have been publicly and officially announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and counsel’s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”), published in writing by it prior to the date hereof. This summary assumes the Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted in their current form, or at all.
This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account or anticipate any changes in the law or any changes in the CRA’s administrative policies and assessing practices, whether by legislative, governmental or judicial action or decision, nor does it take into account or anticipate any other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder, and no representations with respect to the income tax consequences to any Holder are made. Consequently, Holders should consult their own tax advisors with respect to the tax consequences applicable to them, having regard to their own particular circumstances.
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Currency Conversion
Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the subordinate voting shares must be converted into Canadian dollars. Amounts denominated in any other currency must be converted into Canadian dollars using the rate of exchange quoted by the Bank of Canada on the day the amount first arose, or such other rate of exchange as is acceptable to the CRA. As a result, the amount of dividends required to be included in the income of, and capital gains or capital losses realized by, a Holder may be affected by fluctuations in the Canadian dollar/United States dollar exchange rate.
Taxation of Resident Holders
The following portion of this summary applies to Holders (as defined above) who, for the purposes of the Tax Act, are or are deemed to be resident in Canada at all relevant times (herein, “Resident Holders”) and this portion of the summary only addresses such Resident Holders. Certain Resident Holders who might not be considered to hold their subordinate voting shares as capital property may, in certain circumstances, be entitled to make the irrevocable election permitted by subsection 39(4) of the Tax Act to have them and any other “Canadian security” (as defined in the Tax Act) be treated as capital property for the taxation year of the election and in all subsequent taxation years. Resident Holders contemplating such election should consult their own tax advisors for advice as to whether it is available and, if available, whether it is advisable in their particular circumstances.
Taxation of Dividends
A Resident Holder will be required to include in computing income for a taxation year any dividends received, or deemed to be received, in the year by the Resident Holder on the subordinate voting shares. In the case of a Resident Holder that is an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable under the Tax Act to taxable dividends received from taxable Canadian corporations, including the enhanced gross-up and dividend tax credit provisions where the Company designates the dividend as an “eligible dividend” in accordance with the provisions of the Tax Act. There may be restrictions on the ability of the Company to designate any particular dividend as an “eligible dividend”.
A dividend received or deemed to be received by a Resident Holder that is a corporation must be included in computing its income but will generally be deductible in computing the corporation’s taxable income for that taxation year, subject to all of the rules and restrictions under the Tax Act in that regard. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. A corporation that is a “private corporation” or a “subject corporation” (each as defined in the Tax Act), generally will be liable to pay an additional tax (refundable under certain circumstances) under Part IV of the Tax Act on dividends received or deemed to be received on the subordinate voting shares in a year to the extent such dividends are deductible in computing its taxable income for the year.
Disposition of Subordinate Voting Shares
A Resident Holder who disposes, or is deemed to dispose, of a subordinate voting share generally will realize a capital gain (or capital loss) equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base to the Resident Holder of such subordinate voting shares, as the case may be, immediately before the disposition or deemed disposition. The adjusted cost base to a Resident Holder of a subordinate voting share will be determined by averaging the cost of that subordinate voting share with the adjusted cost base (determined immediately before the acquisition of the subordinate voting share) of all other subordinate voting shares held as capital property at that time by the Resident Holder. The taxation of capital gains and losses is generally described below under the heading “Capital Gains and Capital Losses”.
Capital Gains and Capital Losses
Generally, a Resident Holder is required to include in computing income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized by the Resident Holder in such taxation year. Subject to and in accordance with the rules contained in the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a particular taxation year against taxable capital gains realized by the Resident Holder in the year. Allowable capital losses in excess of taxable capital gains realized in a particular taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the Tax Act.
S-17
The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition or deemed disposition of a subordinate voting share may be reduced by the amount of any dividends received or deemed to have been received by such Resident Holder on such shares, to the extent and under the circumstances described in the Tax Act. Similar rules may apply where a Resident Holder that is a corporation is a member of a partnership or a beneficiary of a trust that owns subordinate voting shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant should consult their own tax advisors.
A Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” (as defined in the Tax Act) may be liable to pay an additional tax (refundable in certain circumstances) on certain investment income, including amounts in respect of net taxable capital gains and dividends or deemed dividends that are not deductible in computing the Resident Holder’s taxable income. Such Resident Holders should consult their own tax advisors.
Alternative Minimum Tax
Capital gains realized and dividends received or deemed to be received by a Resident Holder that is an individual or a trust, other than certain specified trusts, may give rise to alternative minimum tax under the Tax Act. Resident Holders should consult their own tax advisors in this regard.
Taxation of Non-Resident Holders
The following portion of this summary is generally applicable to Holders who, for the purposes of the Tax Act and at all relevant times: (i) are neither resident nor deemed to be resident in Canada, and (ii) do not use or hold subordinate voting shares in the course of business carried on or deemed to be carried on in Canada. Holders who meet all of the foregoing requirements are referred to herein as “Non-Resident Holders”, and this portion of the summary only addresses such Non-Resident Holders. Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere. Such Non-Resident Holders should consult their own tax advisors.
Receipt of Dividends
Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder by the Company are subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividend unless reduced by the terms of an applicable tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident. For example, under the Canada-United States Tax Convention (1980), as amended (the “Treaty”), the rate of withholding tax on dividends paid or credited to a Non-Resident Holder who is resident in the U.S. for purposes of the Treaty and entitled to full benefits under the Treaty (a “U.S. Holder”) is generally reduced to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Holder that is a company beneficially owning at least 10% of the Company’s voting shares). Non-Resident Holders should consult their own tax advisors in this regard.
Disposition of Subordinate Voting Shares
A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a subordinate voting share unless such subordinate voting share constitutes “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty or convention.
S-18
Provided the subordinate voting shares are listed on a “designated stock exchange”, as defined in the Tax Act (which currently includes Cboe and Nasdaq) at the time of disposition, the subordinate voting shares will generally not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are satisfied concurrently: (i) (a) the Non-Resident Holder; (b) persons with whom the Non-Resident Holder did not deal at arm’s length; (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; or (d) any combination of the persons and partnerships described in (a) through (c), owned 25% or more of the issued shares of any class or series of shares of the Company; and (ii) more than 50% of the fair market value of the subordinate voting shares was derived directly or indirectly from one or any combination of: real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” (each as defined in the Tax Act), and options in respect of, or interests in or for civil law rights in, such properties. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, the subordinate voting shares may be deemed to be taxable Canadian property. Non-Resident Holders should consult their own tax advisors as to whether their subordinate voting shares Constitute the taxable Canadian property in their particular circumstances.
Even if the subordinate voting shares are taxable Canadian property of a Non-Resident Holder, such Non-Resident Holder may be exempt from tax under the Tax Act on the disposition of such subordinate voting shares by virtue of an applicable income tax treaty or convention. In cases where a Non-Resident Holder disposes, or is deemed to dispose, of a subordinate voting share that is taxable Canadian property of that Non-Resident Holder, and the Non-Resident Holder is not entitled to an exemption from tax under the Tax Act or pursuant to the terms of an applicable income tax treaty or convention, the consequences under the heading “Certain Canadian Federal Income Tax Considerations – Taxation of Resident Holders – Capital Gains and Capital Losses” will generally be applicable to such disposition. Non-Resident Holders who may hold subordinate voting shares as taxable Canadian property should consult their own tax advisors.
If you invest in our subordinate voting shares, you will experience dilution to the extent of the difference between the offering price per share and the as adjusted net tangible book value per share after giving effect to this offering.
Our historical net tangible book value on December 31, 2025 was $1.76 per subordinate voting share. “Net tangible book value” represents our total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by the total number of subordinate voting shares outstanding.
After giving effect to the sale by us of $75,000,000 of subordinate voting shares in this offering at an assumed public offering price of $2.40 per subordinate voting share (the last reported sale price of our subordinate voting shares on Nasdaq on April 8, 2026), and before deducting any fees, commissions and offering expenses payable by us, our net tangible book value as of December 31 2025, as adjusted, would have been $4.35 per subordinate voting share. This represents an immediate increase in the pro forma as adjusted net tangible book value of $2.59 per share to our existing shareholders and immediate dilution in net tangible book value of $0.83 per share to the investors in this offering. The following table illustrates this calculation on a per share basis in U.S. dollars.
| Assumed public offering price per share | $ | 2.40 | ||
| Net tangible book value per share as of December 31, 2025 | $ | 1.76 | ||
| Increase in net tangible book value per share attributable to new investors | $ | 4.35 | ||
| As adjusted net tangible book value per share as of December 31, 2025 after giving effect to this offering | $ | 2.59 | ||
| Dilution per share to new investors | $ | 0.83 |
The above discussion and table are based on 69,807,449 subordinate voting shares (101,057,449 subordinate voting shares on a pro forma basis) outstanding as of December 31, 2025, and does not include the following as of that date:
| ● | 2,850,130 subordinate voting shares issuable upon outstanding options, with a weighted average exercise price of $3.59; |
| ● | 1,744,374 subordinate voting shares issuable upon exercise of outstanding warrants issued in previous offerings (other than the Warrants), with a weighted average exercise price of $3.03; and |
| ● | 2,954,279 subordinate voting shares reserved for issuance upon the vesting of restricted share units of the Company. |
S-19
The above illustration of dilution per subordinate voting share to investors participating in this offering assumes no further exercise of outstanding options or warrants to purchase our subordinate voting shares. To the extent that any of our outstanding options or warrants are exercised, or we issue additional subordinate voting shares, equity securities or convertible debt securities in the future, there may be further dilution to the new investors.
EXPENSES
We estimate that the total expenses of this offering payable by us, excluding the sales agent’s commissions, will be as follows:
| SEC registration fee | $ | 10,375.50 | (1) | |
| Legal fees and expenses | 125,000 | |||
| Accounting fees and expenses | 35,000 | |||
| Miscellaneous | 10,000 | |||
| Total | $ | 180,375.50 |
| (1) | Previously paid (including by appropriate fee registration offsets) with the filing of our registration statement on Form S-3 of which this prospectus supplement forms a part. |
All of the amounts shown are estimates, except the SEC registration fee. We will pay fees and expenses incurred by us incident to the registration of the securities. If any shares are sold, the selling securityholders will pay any brokerage commissions and/or similar charges incurred for the sale of such shares.
Katten Muchin Rosenman LLP is acting as U.S. counsel for the Company in connection with this offering. The validity of the subordinate voting shares offered hereby will be passed upon by MLT Aikins LLP, as Canadian counsel to the Company. The agent is being represented in connection with this offering by Sullivan & Worcester LLP with respect to U.S. legal matters.
The consolidated financial statements of the Company as of December 31, 2025 and December 31, 2024, and for each of the two years in the period ended December 31, 2025, incorporated by reference herein have been so incorporated in reliance on the report of Davidson & Company LLP, an independent registered public accounting firm, given on their authority as experts in auditing and accounting.
S-20
WHERE YOU CAN FIND MORE INFORMATION
This prospectus supplement and the accompanying prospectus are part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and do not contain all the information set forth in the registration statement. Whenever a reference is made in this prospectus supplement or the accompanying prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated by reference in this prospectus supplement and the accompanying prospectus for a copy of such contract, agreement or other document. We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our public filings are available to the public on the SEC’s web site at http://www.sec.gov.
INCORPORATION OF INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with them which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information in this prospectus supplement and the accompanying prospectus. The information incorporated by reference is considered to be part of this prospectus supplement and the accompanying prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this prospectus supplement and the termination of this offering (other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items, unless otherwise indicated therein):
| ● | our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026; and |
| ● | the description of our securities registered pursuant to Section 12 of the Exchange Act contained in Exhibit 4.18 to our Annual Report Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on July 14, 2023, as updated by any amendment or report filed for the purpose of updating such description, including the section of this prospectus titled “Description of Share Capital.” |
We will provide to each person, including any beneficial owner, to whom a prospectus supplement and accompanying prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus supplement and the accompanying prospectus but not delivered with this prospectus supplement and the accompanying prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be directed to:
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario, M5C 1T4
(818) 280-9758
A statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement or the accompanying prospectus. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that was required to be stated or that was necessary to make a statement not misleading in light of the circumstances in which it was made. You should not assume that the information in this prospectus supplement, the accompanying prospectus or in the documents incorporated by reference is accurate as of any date other than the date of those respective documents.
S-21
Up to $75,000,000
Subordinate Voting Shares
Digi Power X Inc.
Prospectus Supplement
Sole Sales Agent
A.G.P.
, 2026
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated April 9, 2026
PROSPECTUS
DIGI POWER X INC.
1,293,746 Subordinate Voting Shares
This prospectus relates to the resale by the selling securityholders named herein (the “Selling Securityholders”) of up to 1,293,746 subordinate voting shares (the “Resale Shares”) of our subordinate voting shares, no par value, consisting of (1) 501,788 previously issued subordinate voting shares in a private placement transaction with the Company in August 2024 (the “August 2024 private placement”), in each case, held by certain of the Selling Securityholders, (2) 522,727 subordinate voting shares issuable upon the exercise of common share purchase warrants issued in the August 2024 private placement, in each case, held by certain of the Selling Securityholders, and (3) up to 269,231 subordinate voting shares issuable upon the exercise of a subordinate voting share purchase warrant issued to H.C. Wainwright & Co., LLC, a Delaware limited liability company (“Wainwright”), pursuant to that certain Settlement and Release Agreement (the “settlement agreement”) dated as of December 19, 2025, by and between the Company and Wainwright.
The Selling Securityholders may sell all or a portion of the Resale Shares from time to time in market transactions through any market on which our subordinate voting shares are then traded, in negotiated transactions or otherwise, and at prices and on terms that will be determined by the then-prevailing market price or at negotiated prices directly or through a broker or brokers, who may act as agent or as principal, or by a combination of such methods of sale. For additional information, see “Plan of Distribution” beginning on page 12 of this prospectus. The Selling Securityholders may sell some, all or none of the shares being offered for resale in this offering.
We are not selling any subordinate voting shares under this prospectus and will not receive any of the proceeds from the sale, if any, of the Resale Shares by the Selling Securityholders. For additional information, see “Use of Proceeds” beginning on page 5 of this prospectus and “Selling Securityholders” beginning on page 6 of this prospectus.
We will bear all costs, expenses and fees in connection with the registration of the Resale Shares. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their sale of the Resale Shares.
We are a “smaller reporting company” and an “emerging growth company” for purposes of federal securities laws and are subject to reduced public company reporting requirements. Accordingly, the information in this prospectus may not be comparable to information provided by companies that are not smaller reporting companies or emerging growth companies.
Our subordinate voting shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “DGXX” and on Cboe Canada (“Cboe”) under the symbol “DGX.” On April 8, 2026, the last reported sale price of our subordinate voting shares on Nasdaq and Cboe was $2.40 and C$3.33, respectively.
INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE “RISK FACTORS” BEGINNING ON PAGE 4 OF THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS THAT WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus or the prospectus to which it relates. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2026
TABLE OF CONTENTS
i
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”). We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference herein were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you.
We have not, and the Selling Securityholders have not, authorized anyone to provide any information or to make any representations, other than those contained or incorporated by reference in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the Selling Securityholders take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the subordinate voting shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained, or incorporated by reference, in this prospectus or in any free writing prospectus that we may authorize for use in connection with this offering, is accurate only as of the respective dates thereof, regardless of its time of delivery or any sale of subordinate voting shares. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus and any applicable free writing prospectuses that we may authorize for use in connection with this offering, together with any documents incorporated by reference herein and therein and the additional information described below under the heading “Where You Can Find More Information” in its entirety, before making an investment decision.
This prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this prospectus in any jurisdiction to or from any person to whom or from whom it is unlawful to make such offer or solicitation of an offer in such jurisdiction. We are offering to sell, and seeking offers to buy, our subordinate voting shares only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of the subordinate voting shares in certain jurisdictions may be restricted by law. No action is being taken in any jurisdiction outside the United States to permit a public offering of the securities or possession or distribution of this prospectus in that jurisdiction. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our subordinate voting shares and the distribution of this prospectus applicable to that jurisdiction.
ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference herein contain “forward-looking information” and “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and within the meaning of Canadian securities laws (collectively, “forward-looking statements”), which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this prospectus are forward-looking statements, including any statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives and expected market growth. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include, but are not limited to:
| ● | the Company’s diversification into operating data centers may not prove to be successful; | |
| ● | the Company’s plan to develop a Tier III data center and other infrastructure projects involves significant risks, many of which are beyond the Company’s control; | |
| ● | the Company depends on significant customers for its data centers; | |
| ● | the bitcoin block reward halves approximately every four years, which reduces the number of bitcoin the Company would receive from solving blocks; | |
| ● | if the award of coins for solving blocks and transaction fees are not sufficiently high, miners (other than of the Company) may not have an adequate incentive to continue mining and may cease their mining operations, which could adversely impact the Company’s mining operations; | |
| ● | the Company relies on a third-party mining pool operator; | |
| ● | insolvency, bankruptcy or cessation of operations of a mining pool operator can have a material adverse effect on the Company; | |
| ● | the Company may be unable to obtain additional financing on acceptable terms or at all; | |
| ● | the Company may be required to sell its cryptocurrency portfolio to pay for expenses; | |
| ● | the Company’s cryptocurrency inventory may be exposed to cybersecurity threats and hacks; | |
| ● | the Company may face delays in remediating the material weaknesses identified in its internal control over financial reporting; | |
| ● | regulatory changes or actions may alter the nature of an investment in the Company or restrict the use of cryptocurrencies in a manner that adversely affects the Company’s operations; | |
| ● | recent changes in U.S. political leadership and economic policies, as well as any future policy changes, may create uncertainty that materially affects the Company’s business and financial performance; | |
| ● | the value of cryptocurrencies may be subject to momentum pricing risk; | |
| ● | cryptocurrency exchanges and other trading venues are relatively new and, in most cases, largely unregulated and may therefore be more exposed to fraud and failure; | |
| ● | banks may not provide banking services, or may cut off banking services, to businesses that provide cryptocurrency-related services or that accept cryptocurrencies as payment; | |
| ● | the impact of geopolitical events on the supply and demand for cryptocurrencies is uncertain; | |
| ● | the further development and acceptance of the cryptographic and algorithmic protocols governing the issuance of and transactions in cryptocurrencies is subject to a variety of factors that are difficult to evaluate; |
iii
| ● | acceptance and/or widespread use of cryptocurrency is uncertain; | |
| ● | the Company is subject to risks associated with the Company’s need for significant electrical power; | |
| ● | the Company’s data center and mining operations require electrical power to be available at commercially feasible rates; | |
| ● | government regulators may potentially restrict the ability of electricity suppliers to provide electricity to mining operations; | |
| ● | the Company is exposed to hashrate and network difficulty, which could reduce the ability of the Company to remain competitive with its peers; | |
| ● | the Company’s operations, investment strategies, and profitability may be adversely affected by competition from other methods of investing in cryptocurrencies; | |
| ● | the Company’s coins may be subject to loss, theft or restriction on access; | |
| ● | incorrect or fraudulent coin transactions may be irreversible; | |
| ● | the price of coins may be affected by the sale of coins by other vehicles investing in coins or tracking cryptocurrency markets; | |
| ● | technological obsolescence and difficulty obtaining hardware may adversely impact the Company’s operating results and financial condition; | |
| ● | exposure to environmental liabilities and hazards may result in the imposition of fines, penalties and restrictions; | |
| ● | the Company’s success is largely dependent on the performance of the Company’s management and executive officers; | |
| ● | the Company may be unable to attract, develop and retain its key personal and establish adequate succession planning; | |
| ● | the Company faces competition from other data center and cryptocurrency companies; | |
| ● | uninsured or uninsurable risks could result in significant financial liabilities; | |
| ● | the Company does not currently pay cash dividends, and, therefore, the Company’s shareholders will not be able to receive a return on their subordinate voting shares unless they sell them; | |
| ● | the subordinate voting shares are subject to volatility risk and there is no guarantee that an active or liquid market will be sustained for the subordinate voting shares; | |
| ● | there are significant legal, accounting, and financial costs of being a publicly traded company which may reduce the resources available for the Company to deploy on its cryptocurrency mining operations; | |
| ● | certain directors and officers may have a conflict of interest between their duties owed to the Company and their interest in other personal or business ventures; | |
| ● | the Company may be subject to litigation; | |
| ● | the Company could lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to the Company; | |
| ● | the Company has a limited history of operations and is in the early stage of development; | |
| ● | ineffective management of growth could result in a failure to sustain the Company’s progress; | |
| ● | the Company may be subject to tax consequences which could reduce the Company’s profitability; | |
| ● | the Company may be exposed to risks from exchanging currencies, including currency exchange fees; and | |
| ● | the other risks described under the heading “Risk Factors” contained in this prospectus and any applicable free writing prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus. |
Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations.
The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as may be required by law. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
iv
This summary highlights selected information contained in more detail elsewhere in this prospectus and in documents incorporated herein by reference. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our subordinate voting shares. For a more complete understanding of the Company, we encourage you to read and consider the more detailed information included or incorporated by reference in this prospectus, including the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements,” and our consolidated financial statements and the accompanying notes thereto incorporated herein by reference.
Our Business
The Company is an innovative energy infrastructure company that develops cutting-edge data centers to drive the expansion of sustainable energy assets. With multiple sites, including our state-of-the-art combined cycle and high-capacity substations, we tap into and enhance the energy grid, supporting both industrial clients and broader energy markets. Our mission is to create efficient, reliable and cost-effective energy solutions by maximizing the potential of our power facilities and building advanced infrastructure to meet the demands of high-performance computing, bitcoin mining and other energy-intensive industries. Digi Power X is focused on developing, owning and operating data center facilities and delivering enterprise colocation and AI/GPU infrastructure services. The Company also owns a 60 MW gas fired power plant in North Tonawanda that currently operates as a peaker plant, providing the grid with electrical power in times of peak demand.
The Company receives digital currencies from “mining”. “Mining” is a process whereby “miners”, which are specialized computers with high amounts of computational processing power, compete to solve “blocks”, which are digital files where digital currency transactions are recorded on the blockchain. A miner that verifies and solves a new block is awarded newly-generated quantity of coins, an amount which is usually proportional to the miner’s contributed hashrate or work (plus a small transaction fee), as an incentive to invest their computer power, as mining is critical to the continuing functioning and security of the networks on which digital currencies operate.
A “Mining Pool” is a service operated by a mining pool operator that pools the resources of individual miners to share their processing power over a network. The Company participates in a Mining Pool that pays Bitcoin rewards utilizing a “Full-Pay-Per-Share” payout of Bitcoin based on a contractual formula, which calculates payout primarily based on the hashrate provided by the Company to the Mining Pool as a percentage of total network hashrate of the Mining Pool, along with other inputs. The Company is entitled to consideration even if a block is not successfully placed by the Mining Pool operator. The Company transitioned its mining operations completely to Mining Pool participation in 2022, which it utilized for the years ended December 31, 2024 and 2025 and continues to use for its Bitcoin mining operations.
The Company has three facilities located in Buffalo, New York, North Tonawanda, New York and Columbiana, Alabama. The Company’s site in North Tonawanda is a 60 MW combined cycle plant with 1.2 EH of current operating hashrate. The Company’s site in Buffalo is an 18.7 MW utility powered site with an operating hashrate of 500 PH. The Company’s site in Alabama is a 22 MW utility powered site. The Company is developing its facility in Columbiana, Alabama into a 55-MW Tier 3 data center, which will be designed to support next generation AI and HPC workloads upon its completion. The Company’s facilities are strategically located in diverse geographic locations to minimize risk.
The Company was incorporated in the Province of British Columbia under the Business Corporations Act (British Columbia) (“BCBCA”) on February 18, 2017, under the name “Chortle Capital Corp.” The Company changed its name on September 18, 2017, to “HashChain Technology Inc.” Following the reverse take-over with Digihost International Inc., which closed on February 14, 2020, the Company changed its name to Digihost Technology Inc. The Company changed its name on March 6, 2025, to “Digi Power X Inc.”
Our subordinate voting shares are listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.” Our principal executive offices are located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127, and our registered office is located at 595 Howe Street - 10th Floor, Vancouver, BC V6C 2T5. Our telephone number is (818) 280-9758.
Corporate Information
Digi Power X Inc. (formerly known as Digihost Technology Inc.) is a company incorporated under the Business Corporations Act (British Columbia). The Company was originally incorporated in Canada under the Business Corporations Act (British Columbia), or the BCBCA, on February 18, 2017, under the name Chortle Capital Corp. and later changed its name to HashChain Technology Inc. (“HashChain”) on September 18, 2017. HashChain was subject to a reverse take-over (“RTO”) by Digihost International, Inc. (“Digi International”), which closed on February 14, 2020. Prior to the closing date of the RTO, the Company passed a special resolution authorizing an unlimited number of proportionate voting shares and an unlimited number of subordinate voting shares without par value. Upon closing of the RTO, HashChain filed articles of amendment to rename itself to Digihost Technology Inc. In connection with the RTO, all the issued and outstanding 6,530,560 HashChain common shares were exchanged for 6,530,560 subordinate voting shares, and all of Digi International’s common shares were exchanged for 33,412,490 subordinate voting shares and 10,000 proportionate voting shares of the Company.
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In connection with and immediately prior to the closing of the RTO, Digi International entered into an agreement with Bit.Management, LLC, NYAM, LLC and BIT Mining International, LLC for the sale, transfer and assignment of 100% right, title and interest in the leasehold improvements and equipment, the transfer of the lease of property at 1001 East Delavan Ave., Buffalo, New York (the “Buffalo Mining Facility”), and transfer of a power contract for the supply of electricity at the facility. As consideration and immediately prior to the closing of the RTO, Digi International issued 104,000 Digi International common shares for an aggregate value of C$2,704,000. Digi International also entered into an agreement with BIT Mining International, LLC for the sale, transfer and assignment of 100% right, title and interest in the leasehold improvements and equipment located at the Buffalo Mining Facility. As consideration and immediately prior to the closing of the RTO, Digi International issued 60,000 Digi International common shares for an aggregate value of C$1,560,000.
The Company filed articles of amendment on March 4, 2025, changing its name from Digihost Technology Inc. to Digi Power X Inc.
Our principal place of business is located at 218 NW 24th Street, 2nd Floor, Miami, Florida 33127, and our registered office is located at 595 Howe Street – 10th Floor, Vancouver, British Columbia V6C 2T5. Our phone number is (917) 242-6549. The Company serves as its agent for service of process in Canada at its registered office located at 595 Howe Street – 10th Floor, Vancouver, British Columbia V6C 2T5. Our website address is www.digipowerx.com. The information contained on our website and available through our website is not incorporated by reference into and should not be considered a part of this prospectus, and the reference to our website in this prospectus is an inactive textual reference only.
Implications of Being an “Emerging Growth Company” and a “Smaller Reporting Company”
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies” such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies are required to adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Smaller Reporting Company
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We are eligible to, and intend to, take advantage of certain of the scaled disclosures available to smaller reporting companies.
August 2024 Private Placement
On August 5, 2024, we entered into securities purchase agreements (referred to herein as the “securities purchase agreements”) with certain accredited investors for gross proceeds of $4 million in a private placement of 3,636,363 units of the Company (each, a “unit”) at a purchase price of $1.10 per unit. Each unit is comprised of one subordinate voting share and one common share purchase warrant (each, a “Private Placement Warrant”), with each Private Placement Warrant entitling the holder to purchase one additional subordinate voting share. The Private Placement Warrants have a per subordinate voting share exercise price of $2.00 and became exercisable beginning on February 15, 2025 (the “initial exercise date”) and, if not previously exercised, are exercisable until February 15, 2028 (the third anniversary of the initial exercise date). As previously reported on a Form 6-K filed by the Company with the SEC on August 16, 2024, we closed the August 2024 private placement and issued the units on August 15, 2024. This prospectus registers the resale of (i) the subordinate voting shares that were issued pursuant to the securities purchase agreements and (ii) the subordinate voting shares issuable upon the exercise, if any, of the Private Placement Warrants issued pursuant to the terms of the securities purchase agreements.
Wainwright Settlement
On December 19, 2025, we entered into the settlement agreement with Wainwright, pursuant to which, among other things, we agreed to issue a warrant to Wainwright that is exercisable for up to 269,231 of our subordinate voting shares (the “Wainwright Warrant” and together with the Private Placement Warrants, the “Warrants”). The Wainwright Warrant has a per subordinate voting share exercise price of $2.85 and is exercisable for a term of five years from February 20, 2026. This prospectus registers the resale of the subordinate voting shares issuable upon the exercise, if any, of the Wainwright Warrant.
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| Issuer | Digi Power X Inc. | |
| Subordinate voting shares issued and outstanding as of April 8, 2026 | 69,807,449 | |
| Subordinate voting shares that may be offered by the selling securityholders | Up to 1,293,746 subordinate voting shares (comprised of (1) 501,788 previously issued subordinate voting shares in the August 2024 private placement, (2) 522,727 subordinate voting shares issuable upon the exercise of the Private Placement Warrants and (3) 269,231 subordinate voting shares issuable upon the exercise of the Wainwright Warrant) | |
| Subordinate voting shares to be issued and outstanding after this offering | 71,101,245 subordinate voting shares (assuming the full exercise of the Warrants by the Selling Securityholders) | |
| Use of proceeds | We will not receive any proceeds from the sale of the Resale Shares by the Selling Securityholders. All net proceeds from the sale of the subordinate voting shares covered by this prospectus will go to the Selling Securityholders. However, we may receive the proceeds from the exercise of any Warrants if the Selling Securityholders do not exercise the Warrants on a cashless basis, if and when exercised. See the sections of this prospectus titled “Use of Proceeds,” and “Plan of Distribution.” | |
| Market for our subordinate voting shares | Our subordinate voting shares are listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.” | |
| Risk factors | Investing in our subordinate voting shares involves a high degree of risk. See the section titled “Risk Factors” and the other information included in or incorporated by reference in this prospectus for a discussion of factors you should consider carefully before deciding to invest in our subordinate voting shares. |
Unless otherwise stated, all information in this prospectus is based on 69,807,499 subordinate voting shares outstanding as of April 8, 2026 and does not include the following as of that date:
| ● | 2,850,130 subordinate voting shares issuable upon outstanding options, with a weighted average exercise price of $3.59; |
| ● | 1,744,374 subordinate voting shares issuable upon exercise of outstanding warrants issued in previous offerings (other than the Warrants), with a weighted average exercise price of $3.03; and |
| ● | 2,954,279 subordinate voting shares reserved for issuance upon the vesting of restricted share units of the Company. |
See “Description of Share Capital” for additional information.
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Investing in our subordinate voting shares involves a high degree of risk. Before you make an investment decision with respect to our subordinate voting shares, you should consider carefully the risks described below and discussed under the section captioned “Risk Factors” contained in our most recent annual report on Form 10-K, which is incorporated by reference in this prospectus, and other information included in any document that we file from time to time with the SEC after the date of this prospectus that is incorporated by reference herein, as well as other information contained or incorporated by reference in this prospectus. If any of the following events or any of the events described in any such other document actually occur, our business, operating results, prospects or financial condition could be materially and adversely affected. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business and operations.
A substantial number of subordinate voting shares may be sold in the market following the effective date of the registration statement of which this prospectus forms a part, which may depress the market price for subordinate voting shares.
We are registering for resale an aggregate of 1,293,746 subordinate voting shares (which includes up to 791,958 subordinate voting shares issuable upon the exercise of the Warrants held by the Selling Securityholders). Assuming the Warrants are exercised in full and are not exercised on a cashless basis, the Selling Securityholders identified in this prospectus can sell up to 1,293,746 subordinate voting shares pursuant to this prospectus. Concurrent with the filing of this prospectus, we are also filing a prospectus supplement and accompanying prospectus in connection with the offering of up to $75,000,000 subordinate voting shares in an at-the-market offering program (the “ATM program”). Sales of substantial amounts of our subordinate voting shares in the public market, or the perception that such sales might occur, could adversely affect the market price of our subordinate voting shares. We cannot predict if and when the Selling Securityholders will sell such shares in the public markets. Furthermore, since the August 2024 private placement, we have issued, and we may again in the future issue, additional subordinate voting shares or other equity or debt securities exercisable for or convertible into subordinate voting shares, including in the ATM program. Any such issuance(s) and resales of the subordinate voting shares could result in substantial dilution to our existing shareholders and could cause our share price to decline. See “Dilution” below.
Our management will have broad discretion over the use of proceeds we receive from any exercise of the Warrants (assuming that the Selling Securityholders do not exercise the Warrants on a cashless basis, if and when exercised), and may use them in ways with which you do not agree and in ways that may not enhance our operating results or the market price of our subordinate voting shares.
Our management will have broad discretion over the use of proceeds that we receive from any exercise of the Warrants (assuming that the Selling Securityholders do not exercise the Warrants on a cashless basis, if and when exercised) by the Selling Securityholders identified in this prospectus. We may spend or invest those proceeds in ways with which our shareholders disagree or that do not yield a favorable return, if at all. We intend to use the net proceeds from any exercise of the warrants for cash as described in “Use of Proceeds.” However, our use of any such proceeds may differ substantially from our current plans. Failure by our management to apply these funds effectively could harm our business, results of operations, cash flows, financial condition and/or prospects. Pending use, we may invest the net proceeds from the offering in a manner that does not produce income or that loses value.
An investment in our securities is speculative, and there can be no assurance of any return on any such investment.
An investment in our securities is highly speculative, and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in their investment, including the risk of losing their entire investment and the other risk factors discussed in this “Risk Factors” section and under the heading “Risk Factors” in the Form 10-K, as well as the risks described in the financial or other information included or incorporated by reference in this prospectus.
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We will not receive any proceeds from the sale of the subordinate voting shares by the Selling Securityholders. All net proceeds from the sale of the subordinate voting shares covered by this prospectus will go to the Selling Securityholders. However, we may receive the proceeds from any exercise of the Warrants if the Selling Securityholders do not exercise the Warrants on a cashless basis, if and when exercised. We expect that the Selling Securityholders will sell their subordinate voting shares as described under “Plan of Distribution.” If all of the Warrants are exercised in full for cash, we will receive gross proceeds from the warrant exercises of approximately $1,812,762.
We intend to use the net proceeds of such Warrant exercise(s), if any, for acquisitions related to infrastructure expansion and for general corporate purposes, which may include operating expenses, research and development, working capital, and general capital expenditures. We will have broad discretion in the way we use these proceeds. See “Risk Factors” above. We may ultimately use the proceeds for different purposes than what we currently intend. Pending any ultimate use of any portion of the proceeds from this offering, if the anticipated proceeds will not be sufficient to fund all the proposed purposes, our management will determine the order of priority for using the proceeds, as well as the amount and sources of other funds needed.
Purchasers of the Resale Shares being offered pursuant to this prospectus may suffer immediate and substantial dilution in the net tangible book value per subordinate voting share. Dilution in net tangible book value per subordinate voting share represents the difference between the amount per subordinate voting share paid by purchasers and the net tangible book value per subordinate voting share immediately after a purchase. The amount of dilution experienced by each purchaser of subordinate voting shares under this prospectus will vary, because the Selling Securityholders who offer and sell the Resale Shares may do so at various times, at prices and at terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. Accordingly, the amount paid per subordinate voting share by each purchaser and the net tangible book value per subordinate voting share at the time of purchase cannot be determined at this time. Therefore, we have not included in this prospectus information about the dilution (if any) to our existing shareholders arising from any such future sales. See “Risk Factors—A substantial number of subordinate voting shares may be sold in the market following the effective date of the registration statement of which this prospectus forms a part, which may depress the market price for subordinate voting shares.”
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The Resale Shares offered by the selling securityholders consist of subordinate voting shares issued and subordinate voting shares issuable upon exercise, if any, of the Warrants that were issued to the Selling Securityholders pursuant to the securities purchase agreements and the settlement agreement. Pursuant to the terms of a registration rights agreement between the Company and the Selling Securityholders (other than Wainwright) (the “Registration Rights Agreement”) that was entered into in connection with the August 2024 private placement, this prospectus generally covers the resale by those Selling Securityholders from time to time of the sum of (i) the number of subordinate voting shares issued pursuant to the securities purchase agreements and (ii) the maximum number of subordinate voting shares issuable upon exercise of the related warrants issued under the securities purchase agreement, in each case, as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Pursuant to the terms of the Wainwright Warrant, the prospectus also covers the resale by Wainwright from time to time of the maximum number of subordinate voting shares issuable upon exercise of the Wainwright Warrant issued under the settlement agreement. The selling securityholders have not had any material relationship with us within the past three years, except for:
| ● | the ownership of the subordinate voting shares and the warrants issued pursuant to the securities purchase agreements and the settlement agreement; and | |
| ● | the Company’s at-the-market offering program, pursuant to which, from its launch in March 2022 until its conclusion in March 2024, the Company issued and sold through Wainwright, as the sales agent for such program, 562,654 subordinate voting shares in exchange for gross proceeds of $1,096,297.71, at an average share price of $1.9484, and received net proceeds of $1,055,456.19 after paying commissions of $32,888.93 to the Wainwright and incurring $7,952.59 of other transaction fees. |
The following table sets forth the name of each of the Selling Securityholders, the number and percentage of our subordinate voting shares beneficially owned by the Selling Securityholders as of March 30, 2026, the number of our subordinate voting shares that may be offered by the Selling Securityholders under this prospectus, and the number and percentage of our subordinate voting shares beneficially owned by the Selling Securityholders assuming all of the subordinate voting shares registered hereunder are sold. Applicable percentage ownership is based on 69,807,499 subordinate voting shares issued and outstanding as of March 30, 2026, and does not include any subordinate voting shares issuable upon conversion of our proportionate voting shares. Except as noted below, beneficial ownership is determined in accordance with the rules of the SEC and includes voting or dispositive power with respect to our subordinate voting shares. Generally, a person “beneficially owns” a security if he, she or it possesses sole or shared voting or investment power over that security, including warrants and certain other derivative securities that are currently exercisable or will become exercisable within 60 days. Shares subject to warrants that are currently exercisable or exercisable within 60 days are considered outstanding and beneficially owned by the person holding such warrants for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The information in the table below and the footnotes thereto regarding subordinate voting shares to be beneficially owned after the offering assumes that the Selling Securityholders have exercised their Warrants in full, despite the limitations on exercise in the Warrants (including as described below) and further assumes that the Selling Securityholders sell all of the subordinate voting shares being offered by them under this prospectus and do not sell any of the other subordinate voting shares they beneficially own prior to the offering.
Unless otherwise indicated, all information contained in the table below and the footnotes thereto is based upon information provided to us by the Selling Securityholders. The Selling Securityholders may have sold, transferred, otherwise disposed of or purchased, or may sell, transfer, otherwise dispose of or purchase, at any time and from time to time, subordinate voting shares in transactions exempt from the registration requirements of the Securities Act or in the open market after the date on which they provided the information set forth in the table below.
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| Name of Selling Securityholder | Number of Subordinate Voting Shares Owned Prior to Offering | Percentage of Subordinate Voting Shares Owned Prior to Offering | Maximum Number of Subordinate Voting Shares to be Sold Pursuant to this Prospectus | Number of Subordinate Voting Shares Owned After Offering | Percentage of Subordinate Voting Shares Owned After Offering | |||||||||||||||
| James McCabe | 812,954 | (1) | 1.16 | % | 590,908 | 222,046 | * | |||||||||||||
| Scott Herman | 181,818 | (2) | * | 181,818 | 0 | 0 | % | |||||||||||||
| Marc Hermes | 160,995 | (3) | * | 136,364 | 24,631 | * | ||||||||||||||
| JHRW Holdings, LLC | 151,425 | (4) | * | 115,425 | 36,000 | * | ||||||||||||||
| H.C. Wainwright & Co., LLC | 269,231 | (5) | * | 269,231 | 0 | 0 | % | |||||||||||||
| * | Less than 1%. |
| (1) | Comprised of (i) 295,454 subordinate voting shares issued to James McCabe in connection with the August 2024 private placement, (ii) up to 295,454 subordinate voting shares issuable upon exercise, if any, of a warrant issued to Mr. McCabe in connection with the August 2024 private placement, (iii) 174,697 subordinate voting shares held by Mr. McCabe, and (iv) up to 47,349 subordinate voting shares issuable upon exercise, if any, of underlying warrants held by James McCabe. The business address for Mr. McCabe is 68 Fiesta Way, Fort Lauderdale, Florida 33301. |
| (2) | Comprised of (i) 90,909 subordinate voting shares issued to Scott Herman in connection with the August 2024 private placement and (ii) up to 90,909 subordinate voting shares issuable upon exercise, if any, of a warrant issued to Mr. Herman in connection with the August 2024 private placement. Mr. Herman’s address is 900 Hillsboro Mile #2, Hillsboro Beach, Florida 33062. |
| (3) | Comprised of (i) 68,182 subordinate voting shares issued to Marc Hermes in connection with the August 2024 private placement, (ii) up to 68,182 subordinate voting shares issuable upon exercise, if any, of a warrant issued to Mr. Hermes in connection with the August 2024 private placement, and (iii) 24,631 subordinate voting shares held by Mr. Hermes. Mr. Hermes’ address is 1328 Citrus Isle, Fort Lauderdale, Florida 33315. |
| (4) | Comprised of (i) 47,243 subordinate voting shares issued to JHRW Holdings, LLC (“JHRW”) in connection with the August 2024 private placement, (ii) up to 68,182 subordinate voting shares issuable upon exercise, if any, of a warrant issued to JHRW in connection with the August 2024 private placement, and (iii) 36,000 subordinate voting shares held by JHRW. Rhett Wadsworth is the sole manager of JHRW and in such capacity has the right to vote and dispose of the securities held by JHRW. The business address for JHRW, and Mr. Wadsworth, is 1985 N Andrews Ave., Suite 201, Wilton Manors, Florida 33311. |
| (5) | Comprised of 269,231 subordinate voting shares underlying the Wainwright Warrant. Wainwright is a registered broker dealer and has sole voting and dispositive power over the securities held. The business address for Wainwright is 430 Park Avenue, New York, New York 10022. |
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General
The following is a summary of the material terms of our share capital, as set forth in our articles of association, and certain related sections of the BCBCA. The following summary is subject to, and is qualified in its entirety by reference to, the provisions of our articles of association and the applicable provisions of the BCBCA. A copy of our articles of association is filed as an exhibit to the registration statement of which this prospectus is a part.
Share Capital
Our authorized share capital consists of:
| ● | unlimited subordinate voting shares, no par value; and |
| ● | unlimited proportionate voting shares, no par value. |
As of April 8, 2026, there were 69,807,449 subordinate voting shares and 3,333 proportionate voting shares issued and outstanding. Proportionate voting shares are not available for distribution to the public. Proportionate voting shares may be converted at the holder’s option into subordinate voting shares at a ratio of 200 subordinate voting shares for every 1 proportionate voting share.
In addition, as of the date of this prospectus, there were: (i) 2,850,130 subordinate voting shares issuable upon the exercise of outstanding options at a weighted average exercise price of $3.59; (ii) 1,744,374 subordinate voting shares reserved for issuance on exercise of 1,744,374 issued and outstanding warrants of the Company with a weighted average exercise price of $3.03; and (iii) 2,954,279 subordinate voting shares reserved for issuance upon the vesting of 2,954,279 restricted share units, for a total of 77,356,232 subordinate voting shares on a fully diluted basis (including 666,600 subordinate voting shares issuable upon conversion of the 3,333 issued and outstanding proportionate voting shares as of such date).
Subordinate Voting Shares
Each holder of subordinate voting shares is entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of subordinate voting shares are entitled to one vote per subordinate voting share on all matters subject to shareholder vote, voting together as a single class with holders of proportionate voting shares, except as otherwise prohibited by law.
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 will be entitled to participate ratably along with all other holders of subordinate voting shares and proportionate voting shares (on an as-converted to subordinate voting share basis).
The holders of the subordinate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu as to dividends and any declaration or payment of any dividend on the subordinate voting shares.
Except as otherwise provided in this prospectus, the subordinate voting shares and proportionate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA. Our subordinate voting shares are not subject to any pre-emptive rights, conversion or exchange rights, redemption, retraction, purchase for cancellation or surrender provisions, sinking or purchase fund provisions, provisions permitting or restricting the issuance of additional securities or provisions requiring a shareholder to contribute additional capital.
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Proportionate Voting Shares
Holders of proportionate voting shares are entitled to receive notice of and to attend all meetings of shareholders of the Company. Holders of proportionate voting shares are entitled to one vote in respect of each subordinate voting share into which such proportionate voting share could ultimately then be converted, which for greater certainty, shall be equal to 200 votes per proportionate voting share, on all matters subject to shareholder vote, voting together as a single class with holders of subordinate voting shares, except as otherwise prohibited by law.
Holders of proportionate voting shares shall have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu (on an as-converted basis, assuming conversion of all proportionate voting shares into subordinate voting shares at the conversion ratio of 200:1) as to dividends and any declaration or payment of any dividend on the subordinate voting shares. No dividend will be declared or paid on the proportionate voting shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted basis) on the subordinate voting shares.
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 proportionate voting shares will be entitled to participate ratably along with all other holders of proportionate voting shares (on an as-converted to resulting issuer subordinate voting share basis) and subordinate voting shares.
Each proportionate voting share is convertible, at the option of the holder thereof at any time after the date of issuance of such share, into fully paid and non-assessable subordinate voting shares as is determined by multiplying the number of proportionate voting shares by the 200. Proportionate voting shares are not available for distribution to the public.
Except as otherwise described in this prospectus, the proportionate voting shares and subordinate voting shares are equal in all respects and shall be treated as shares of a single class for all purposes under the BCBCA.
Anti-Takeover Provisions
Some provisions of the BCBCA and other British Columbia laws could make the following transactions more difficult: an acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that shareholders may otherwise consider to be in their best interests or in our best interests, including transactions that provide for payment of a premium over the market price for our subordinate voting shares.
Listing
Our subordinate voting shares are currently listed on Nasdaq under the symbol “DGXX” and on Cboe under the symbol “DGX.”
Transfer Agent and Registrar
The transfer agent and registrar for our subordinate voting shares is Marrelli Trust Company Limited, 620 – 1111 Melville St., Vancouver, British Columbia, V6E 3V6.
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DESCRIPTION OF WARRANTS
August 2024 Private Placement Warrants
The following is a brief summary of the Private Placement Warrants and is qualified in its entirety by reference to the provisions contained in the form of common share purchase warrant, dated August 15, 2024, filed as an exhibit to our annual report on Form 10-K for the year ended December 31, 2025 and as Exhibit 4.1 to the Company’s registration statement on Form S-3 of which this prospectus forms a part.
Exercisability. The Private Placement Warrants became exercisable on February 15, 2025, and, if not previously exercised, are exercisable until February 15, 2028 (the third anniversary of the initial exercise date).
Exercise Limitation. A holder does not have the right to exercise any portion of the warrant issued thereto if such holder (together with its affiliates and any other persons acting as a group together with the holder and any of the holder’s affiliates) would beneficially own in excess of 9.99% of the number of subordinate voting shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Private Placement Warrants. A holder, upon notice to us, may decrease the beneficial ownership limitation at any time. If such beneficial ownership limitation is reduced, then, upon 61 days’ prior written notice to us, a holder may increase the beneficial ownership limitation back to 9.99% of the number of subordinate voting shares outstanding immediately after giving effect to the exercise.
Exercise Price. Each Private Placement Warrant has an exercise price of $2.00 per subordinate voting share, subject to certain adjustments as described further in the form of warrant. If we, at any time while the Private Placement Warrants are outstanding: (i) pay a dividend or otherwise make a distribution or distributions on our subordinate voting shares or any other equity or equity equivalent securities payable in subordinate voting shares (which, for avoidance of doubt, shall not include any subordinate voting shares issued by the Company upon exercise of the applicable warrant), (ii) subdivide outstanding subordinate voting shares into a larger number of shares, (iii) combine (including by way of reverse share split) outstanding subordinate voting shares into a smaller number of shares, or (iv) issue by reclassification of the subordinate voting shares any shares in the capital of the Company, then, in each case, the exercise price shall be multiplied by a fraction of which the numerator shall be the number of subordinate voting shares outstanding immediately before such event and of which the denominator shall be the number of subordinate voting shares outstanding immediately after such event, and the number of shares issuable upon exercise of each such Private Placement Warrant shall be proportionately adjusted such that the aggregate exercise price of such Private Placement Warrant remains unchanged.
Fundamental Transaction. If, at any time while the Private Placement Warrants are outstanding, (i) we, directly or indirectly, in one or more related transactions effect any merger or consolidation of the Company with or into another person, (ii) we effect any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of our assets in one or a series of related transactions, (iii) any tender offer, exchange offer or like transaction (whether by us or another person) is completed pursuant to which holders of subordinate voting shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding subordinate voting shares, (iv) we, directly or indirectly, in one or more related transactions effect any reclassification, reorganization or recapitalization of the subordinate voting shares or any compulsory share exchange pursuant to which the subordinate voting shares are effectively converted into or exchanged for other securities, cash or property, or (v) we, directly or indirectly, in one or more related transactions consummate a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person or group of persons whereby such other person or group acquires more than 50% of the outstanding subordinate voting shares (each, a “fundamental transaction”), then, upon any subsequent exercise of the applicable Private Placement Warrant, the holder will have the right to receive, for each subordinate voting share that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, at the option of the holder, the number of subordinate voting shares (or successor security) of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of subordinate voting shares for which such warrant is exercisable immediately prior to such fundamental transaction.
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Transferability. Subject to compliance with applicable securities laws, each of the Private Placement Warrants and all rights thereunder are transferable, in whole or in part, upon surrender of such Private Placement Warrant at the principal office of the Company or its designated agent, together with a written assignment of the Private Placement Warrant by the holder or its agents.
Exchange Listing. We have not and do not intend to apply to list the Private Placement Warrants on any securities exchange or nationally recognized trading system.
Rights as a Shareholder. Except as otherwise provided in the Private Placement Warrants or by virtue of such holder’s ownership of our subordinate voting shares, the holder of a Private Placement Warrant does not have the rights or privileges of a holder of our subordinate voting shares, including any voting rights, until the holder exercises the Private Placement Warrant.
Governing Law. The Private Placement Warrants are governed by New York law.
Wainwright Warrant
The following is a brief summary of the Wainwright Warrant issued pursuant to the settlement agreement and is qualified in its entirety by reference to the provisions contained in the subordinate voting share purchase warrant, dated February 20, 2026, filed as Exhibit 4.2 to the Company’s registration statement on Form S-3 of which this prospectus forms a part.
Exercisability. The Wainwright Warrant became exercisable on February 20, 2026, and, if not previously exercised, is exercisable until February 20, 2031 (the fifth anniversary of the date of issuance) (the “termination date”).
Exercise Limitation. A holder does not have the right to exercise any portion of the Wainwright Warrant issued thereto if such holder (together with its affiliates and any other persons acting as a group together with the holder and any of the holder’s affiliates) would beneficially own in excess of 4.99% of the number of subordinate voting shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Wainwright Warrant. A holder, upon notice to us, may decrease the beneficial ownership limitation at any time. Upon 61 days’ prior notice to us, a holder may increase the beneficial ownership limitation to 9.99% of the number of subordinate voting shares outstanding immediately after giving effect to the exercise.
Exercise Price. The Wainwright Warrant has an exercise price of $2.85 per subordinate voting share, subject to certain adjustments as described further in the form of warrant. If, at any time while the Wainwright Warrant is outstanding, we: (i) pay a dividend or otherwise make a distribution or distributions on our subordinate voting shares or any other equity or equity equivalent securities payable in subordinate voting shares (which, for avoidance of doubt, shall not include any subordinate voting shares issued by the Company upon exercise of the applicable Wainwright Warrant), (ii) subdivide outstanding subordinate voting shares into a larger number of shares, (iii) combine (including by way of reverse share split) outstanding subordinate voting shares into a smaller number of shares, or (iv) issue by reclassification of the subordinate voting shares any shares in the capital of the Company, then, in each case, the exercise price shall be multiplied by a fraction of which the numerator shall be the number of subordinate voting shares outstanding immediately before such event and of which the denominator shall be the number of subordinate voting shares outstanding immediately after such event, and the number of shares issuable upon exercise of the Wainwright Warrant shall be proportionately adjusted such that the aggregate exercise price of the Wainwright Warrant remains unchanged.
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Fundamental Transaction. If, at any time while the Wainwright Warrant is outstanding, (i) we, directly or indirectly, in one or more related transactions effect any merger or consolidation of the Company with or into another person, (ii) we effect any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of our assets in one or a series of related transactions, (iii) any tender offer, exchange offer or like transaction (whether by us or another person) is completed pursuant to which holders of subordinate voting shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding subordinate voting shares, (iv) we, directly or indirectly, in one or more related transactions effect any reclassification, reorganization or recapitalization of the subordinate voting shares or any compulsory share exchange pursuant to which the subordinate voting shares are effectively converted into or exchanged for other securities, cash or property, or (v) we, directly or indirectly, in one or more related transactions consummate a share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person or group of persons whereby such other person or group acquires more than 50% of the outstanding subordinate voting shares (each, a “fundamental transaction”), then, upon any subsequent exercise of the applicable Wainwright Warrant, the holder will have the right to receive, for each subordinate voting share that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, at the option of the holder, the number of subordinate voting shares (or successor security) of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of subordinate voting shares for which such warrant is exercisable immediately prior to such fundamental transaction.
Transferability. Subject to compliance with applicable securities laws, the Wainwright Warrant and all rights thereunder are transferable, in whole or in part, upon surrender of the Wainwright Warrant at the principal office of the Company or its designated agent, together with a written assignment of the Wainwright Warrant by the holder or its agents.
Mandatory Redemption. If (1) the Wainwright Warrant is still outstanding as of the termination date and (2) at any time from the date on which the Wainwright Warrant was issued until the termination date, there is no period of five consecutive trading days on which the volume-weighted average price of the subordinate voting shares exceeds $4.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and similar events), then the Company is required to redeem the Wainwright Warrant within five (5) business days following the termination date by paying to Wainwright an aggregate amount of $0.5572 per subordinate voting share available to be issued under the Wainwright Warrant immediately prior to the termination thereof in accordance with its terms.
Exchange Listing. We have not and do not intend to apply to list the Wainwright Warrant on any securities exchange or nationally recognized trading system.
Rights as a Shareholder. Except as otherwise provided in the Wainwright Warrant or by virtue of such holder’s ownership of our subordinate voting shares, the holder of the Wainwright Warrant does not have the rights or privileges of a holder of our subordinate voting shares, including any voting rights, until the holder exercises the Wainwright Warrant.
Governing Law. The Wainwright Warrant is governed by New York law.
We are registering the subordinate voting shares that were issued, and subordinate voting shares that may be issuable upon exercise, if any, of the Warrants that were issued, to the Selling Securityholders pursuant to the terms of the securities purchase agreements and the settlement agreement in order to permit the resale of those subordinate voting shares by the holders of such shares and warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling Securityholders of the Resale Shares. We will bear all fees and expenses incident to our obligation to register the Resale Shares.
The Selling Securityholders may sell all or a portion of Resale Shares through one or more underwriters, broker-dealers or agents. If the Resale Shares are sold through underwriters or broker-dealers, the Selling Securityholders will be responsible for underwriting discounts or commissions or agent’s commissions. The Resale Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one or more of the following methods:
| ● | on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
| ● | in the over-the-counter market; |
| ● | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| ● | through the writing of options, whether such options are listed on an options exchange or otherwise; |
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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| ● | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | short sales effected after the effective date of the registration statement of which this prospectus is a part; |
| ● | sales pursuant to Rule 144; |
| ● | broker-dealers may agree with the Selling Securityholders to sell a specified number of such shares at a stipulated price per share; |
| ● | a combination of any such methods of sale; and |
| ● | any other method permitted pursuant to applicable law. |
If the Selling Securityholders effect such transactions by selling subordinate voting shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Securityholders or commissions from purchasers of the subordinate voting shares for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of subordinate voting shares or otherwise, the Selling Securityholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the subordinate voting shares in the course of hedging in positions they assume. After the registration statement of which this prospectus is a part is declared effective, the Selling Securityholders may also sell subordinate voting shares short and deliver subordinate voting shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Selling Securityholders may also loan or pledge subordinate voting shares to broker-dealers that in turn may sell such shares.
The Selling Securityholders may pledge or grant a security interest in some or all of the subordinate voting shares, Warrants owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the subordinate voting shares from time to time pursuant to this prospectus or any amendment under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of Selling Securityholders to include the pledgee, transferee or other successors in interest as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer and donate the subordinate voting shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The Selling Securityholders and any broker-dealer participating in the distribution of the subordinate voting shares may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the subordinate voting shares is made, a prospectus supplement, if required, will be distributed, which will set forth the aggregate amount of subordinate voting shares being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the Selling Securityholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some states, the subordinate voting shares may be sold in such states only through registered or licensed brokers or dealers.
There can be no assurance that any Selling Securityholder will sell any or all of the subordinate voting shares registered pursuant to the registration statement, of which this prospectus forms a part. The Selling Securityholders may also sell the subordinate voting shares under Rule 144, Rule 904 of Regulation S under the Securities Act or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.
The Selling Securityholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the subordinate voting shares by the Selling Securityholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the subordinate voting shares to engage in market-making activities with respect to the subordinate voting shares. All of the foregoing may affect the marketability of the subordinate voting shares and the ability of any person or entity to engage in market-making activities with respect to the subordinate voting shares.
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We will pay all expenses of the registration of the subordinate voting shares (including subordinate voting shares issuable upon any exercise of the warrants) pursuant to the Registration Rights Agreement and the settlement agreement, estimated to be approximately $70,000 in total, including, without limitation, SEC filing fees; provided, however, that the Selling Securityholders will pay all underwriting discounts and selling commissions, if any. We will indemnify certain of the Selling Securityholders against liabilities, including some liabilities under the Securities Act, in accordance with the Registration Rights Agreement, or certain of the Selling Securityholders will be entitled to contribution. In accordance with the Registration Rights Agreement, we may be indemnified by certain of the Selling Securityholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the Selling Securityholders specifically for use in this prospectus, or we may be entitled to contribution.
Once sold under the registration statement, of which this prospectus forms a part, the subordinate voting shares will be freely tradable in the hands of persons other than our affiliates.
CERTAIN U.S. AND CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
Certain U.S. Federal Income Tax Considerations
The following discussion describes certain U.S. federal income tax considerations for U.S. Holders (as defined below) of an investment in the subordinate voting shares acquired pursuant to the offering. The effects of any applicable state or local laws, or other U.S. federal tax laws such as estate and gift tax laws, or the Medicare contribution tax on net investment income or the alternative minimum tax, are not discussed. This discussion applies only to investors who acquire and hold the subordinate voting shares as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment), and who have the U.S. Dollar as their functional currency. This discussion is based on the Code, U.S. Treasury regulations promulgated thereunder, judicial decisions, published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), all as in effect as of the date of this prospectus. All of the foregoing authorities are subject to change, which change could apply retroactively and could adversely affect the tax considerations described below.
The following discussion does not address all U.S. federal income tax considerations relevant to a holder’s particular circumstances or to holders subject to particular rules, including, without limitation:
| o | U.S. expatriates and certain former citizens or long-term residents of the United States; |
| o | persons whose functional currency is not the U.S. Dollar; |
| o | persons holding the subordinate voting shares as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
| o | banks, insurance companies and other financial institutions; |
| o | real estate investment trusts or regulated investment companies; |
| o | brokers, dealers or traders in securities, commodities or currencies; |
| o | S corporations or entities or arrangements treated as partnerships for U.S. federal income tax purposes; |
| o | tax-exempt organizations or governmental organizations; |
| o | individual retirement accounts or other tax deferred accounts; |
| o | persons who acquired the subordinate voting shares pursuant to the exercise of any employee share option or otherwise as compensation; |
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| o | persons that own or are deemed to own 10% or more of the Company’s stock by vote or value directly, indirectly or constructively; |
| o | persons subject to special tax accounting rules as a result of any item of gross income with respect to the subordinate voting shares being taken into account in an applicable financial statement; |
| o | persons that hold subordinate voting shares through a permanent establishment or fixed base outside the United States; and |
| o | persons deemed to sell subordinate voting shares under the constructive sale provisions of the Code. |
U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE U.S. STATE AND LOCAL AND NON-U.S. TAX CONSIDERATIONS TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SUBORDINATE VOTING SHARES.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of subordinate voting shares that, for U.S. federal income tax purposes, is or is treated as any of the following:
| o | an individual who is a citizen or resident of the United States; |
| o | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
| o | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
| o | a trust that (1) is subject to the supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
If an investor is an entity taxable as a partnership for U.S. federal income tax purposes, such investor’s tax treatment generally will depend on the activities of the partnership. Partnerships holding subordinate voting shares and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences applicable to them.
Taxation of Dividends and Other Distributions on the Subordinate Voting Shares
The discussion in this section is subject to the discussion below regarding PFICs.
The gross amount of any distribution to a U.S. Holder with respect to the subordinate voting shares, including any non-U.S. taxes withheld from the amount paid, will be included in such U.S. Holder’s gross income as dividend income when actually or constructively received to the extent that the distribution is paid out of the Company’s current or accumulated earnings and profits (as determined applying U.S. federal income tax principles). To the extent the amount of the distribution exceeds the Company’s current and accumulated earnings and profits, it will be treated first as a return of a U.S. Holder’s tax basis in the subordinate voting shares, and to the extent the amount of the distribution exceeds the tax basis, as capital gain. The Company does not intend to calculate its earnings and profits applying U.S. federal income tax principles. Therefore, a U.S. Holder should expect that distributions will generally be reported as ordinary dividend income. Dividends paid by the Company will not be eligible for the dividends-received deduction available to corporations in respect of dividends received from U.S. corporations.
Subject to certain holding period and other limitations, dividends paid on the subordinate voting shares to certain non-corporate U.S. Holders may be “qualified dividend income” taxable for regular U.S. federal income tax purposes at preferential tax rates. Non-corporate U.S. Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends.
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Dividends will be includible in the income of a U.S. Holder in a U.S. Dollar amount calculated by reference to the exchange rate on the day the distribution is received. A U.S. Holder that receives a foreign currency distribution and converts the foreign currency into U.S. Dollars subsequent to receipt may have foreign exchange gain or loss based on any appreciation or depreciation in the value of the foreign currency against the U.S. Dollar, which will generally be U.S.-source ordinary income or loss. A loss might not be deductible due to certain limitations.
Dividends will generally constitute foreign source income for foreign tax credit limitation purposes. Any tax withheld with respect to distributions on the subordinate voting shares may, subject to a number of complex limitations, be claimed as a foreign tax credit against such U.S. Holder’s U.S. federal income tax liability or may be claimed as a deduction for U.S. federal income tax purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends generally will constitute “passive category income”. The rules with respect to the foreign tax credit are complex and may depend upon a U.S. Holder’s particular circumstances. U.S. Holders should consult their tax advisor regarding the availability of the foreign tax credit under their particular circumstances.
Taxation of Disposition of the Subordinate Voting Shares
The discussion in this section is subject to the discussion below regarding PFICs.
A U.S. Holder will recognize gain or loss on any sale, exchange or other taxable disposition of the subordinate voting shares equal to the difference between the amount realized (in U.S. Dollars) on the disposition and such holder’s tax basis (in U.S. Dollars) in the subordinate voting shares. Any such gain or loss will be capital gain or loss, and generally will be long-term capital gain or loss if such U.S. Holder has held the subordinate voting shares for more than one year at the time of the disposition. Otherwise, such gain or loss generally will be short-term capital gain or loss. Long-term capital gain recognized by certain non-corporate U.S. Holders, including individuals, generally will be taxable at reduced rates. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S.- source income or loss for foreign tax credit limitation purposes. U.S. Holders should consult their tax advisors regarding the proper treatment of gain or loss in their particular circumstances.
Passive Foreign Investment Company
As a non-United States corporation, the Company will be a passive foreign investment company, or “PFIC”, for U.S. federal income tax purposes for any taxable year if, after applying certain look-through rules with respect to subsidiaries in which the Company owns at least 25% (by vote or value) of the stock, either:
| o | at least 75% of its gross income for such taxable year is passive income, or |
| o | at least 50% of the total value of its assets (generally based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. |
The Company believes it was not a PFIC for the year ended December 31, 2025. Based on the market price of the subordinate voting shares and the composition of the Company’s income and assets, including goodwill, the Company also does not expect to be treated as a PFIC for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that must be made annually after the close of each taxable year, and is dependent on a number of factors, including the value of the Company’s passive assets, the amount and type of the Company’s gross income and the market price of the subordinate voting shares, which could fluctuate significantly. Therefore, there can be no assurance that the Company will not be a PFIC for the current or future taxable years.
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If the Company is a PFIC for any taxable year during a U.S. Holder’s holding period for the subordinate voting shares, it generally will continue to be treated as a PFIC with respect to such holder’s investment in the subordinate voting shares for all succeeding years during which such holder holds the subordinate voting shares. In that event, a U.S. Holder would (unless it made one of the elections discussed below on a timely basis) be taxable on gain recognized on a disposition of the subordinate voting shares and upon receipt of certain “excess distributions” (generally, distributions that exceed 125% of the average amount of distributions in respect of the subordinate voting shares received during the preceding three taxable years or, if shorter, during the U.S. Holder’s holding period prior to the distribution year) as if such income had been recognized ratably over the U.S. Holder’s holding period. Tax would be computed on such income at the highest ordinary income tax rate in effect for each taxable year to which income is allocated, and an interest charge on the tax as so computed would also apply.
A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If a U.S. Holder makes a valid mark-to-market election for the subordinate voting shares, such holder will include in income for each year that the Company is treated as a PFIC, an amount equal to the excess, if any, of the fair market value of the subordinate voting shares as of the close of such holder’s taxable year over the holder’s adjusted basis in the subordinate voting shares. Amounts included in a U.S. Holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the subordinate voting shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the subordinate voting shares, as well as to any loss realized on the actual sale or disposition of the subordinate voting shares, in each case to the extent the amount of such loss does not exceed the net mark-to-market gains for the subordinate voting shares previously included in income. A U.S. Holder’s basis in the subordinate voting shares will be adjusted to reflect any such income or loss amounts.
The mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations, other than in de minimis quantities, on at least 15 days during each calendar quarter. The subordinate voting shares are listed on Nasdaq, which is a qualified exchange. Because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs the Company owns, a U.S. Holder generally will continue to be subject to the PFIC rules with respect to such holder’s indirect interest in any investments held by the Company that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. The Company currently does not have any non-U.S. subsidiaries.
U.S. Holders should consult their tax advisor as to the availability and desirability of a mark-to-market election.
As an alternative to the tax treatment described above, a U.S. Holder could elect to treat the Company as a “qualified electing fund” (a “QEF”), in which case the U.S. Holder would be taxed currently, for each taxable year that the Company is a PFIC, on its pro rata share of the Company’s ordinary earnings and net capital gain (subject to a separate election to defer payment of taxes, which deferral is subject to an interest charge). Special rules apply if a U.S. Holder makes a QEF election after the first taxable year of its holding period in which the Company is a PFIC. In the event that the Company concludes that it will be classified as a PFIC, the Company will also determine at that time whether it will provide U.S. Holders with the information that is necessary to make a QEF election. Amounts includable in income as a result of a QEF election will be determined without regard to the Company’s prior year losses or the amount of cash distributions, if any, received from the Company. A U.S. Holder’s basis in its subordinate voting shares will increase by any amount included in income and decrease by any distributions of amounts previously taxed under the QEF rules.
If the Company is a PFIC for any taxable year during which a U.S. Holder owns subordinate voting shares, it generally will continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years even if it ceases to meet the requirements for PFIC status. Notwithstanding any election made with respect to the subordinate voting shares, if the Company is a PFIC in either the taxable year of the distribution or the preceding taxable year, dividends received with respect to the subordinate voting shares will not qualify as “qualified dividends” eligible for taxation at reduced federal income tax rates.
A U.S. Holder of a PFIC is required to file an IRS Form 8621. U.S. Holders are urged to consult their tax advisors regarding the potential application of the PFIC rules to an investment in the subordinate voting shares.
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Information Reporting and Backup Withholding
Dividend payments with respect to the subordinate voting shares and proceeds from the sale, exchange or other disposition of the subordinate voting shares may be subject to information reporting to the IRS and U.S. backup withholding. Certain U.S. Holders are exempt from backup withholding, including corporations and certain tax-exempt organizations. A U.S. Holder will be subject to backup withholding if such holder is not otherwise exempt and such holder:
| 1. | fails to furnish the holder’s taxpayer identification number, which for an individual is ordinarily his or her social security number; |
| 2. | furnishes an incorrect taxpayer identification number; |
| 3. | is notified by the IRS that the holder previously failed to properly report payments of interest or dividends; or |
| 4. | fails to certify under penalties of perjury that the holder has furnished a correct taxpayer identification number and that the IRS has not notified the holder that the holder is subject to backup withholding. |
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
Additional Reporting Requirements
Certain U.S. Holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include the subordinate voting shares) are required to report information relating to such assets, subject to certain exceptions (including an exception for subordinate voting shares held in accounts maintained by certain financial institutions). Penalties can apply if U.S. Holders fail to comply with such reporting requirements. U.S. Holders should consult their tax advisors regarding the applicability of these requirements to their acquisition and ownership of subordinate voting shares.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE SUBORDINATE VOTING SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR OWN PARTICULAR CIRCUMSTANCES.
Certain Canadian Federal Income Tax Consequences
The following summary describes, as of the date hereof, the principal Canadian federal income tax considerations under the Income Tax Act (Canada) (the “Tax Act”), generally applicable to a holder who acquires, as beneficial owner, Resale Shares pursuant to the offering, and who, for the purposes of the Tax Act and at all relevant times, holds Resale Shares as capital property and deals at arm’s length and is not affiliated with the Company, the Selling Securityholder and any subsequent purchaser of such securities. A holder who meets all of the foregoing requirements is referred to as a “Holder” herein, and this summary only addresses such Holders. Generally, Resale Shares will be considered to be capital property to a Holder, provided the Holder does not hold Resale Shares in the course of carrying on a business of trading or dealing in securities and has not acquired the Resale Shares in one or more transactions considered to be an adventure or concern in the nature of trade.
This summary is not applicable to a holder (i) that is a “financial institution”, as defined in the Tax Act for the purposes of the mark-to-market rules in the Tax Act, (ii) that is a “specified financial institution”, as defined in the Tax Act, (iii) of an interest which is a “tax shelter investment” as defined in the Tax Act, (iv) that has elected to determine its Canadian tax results in a “functional currency” other than the Canadian dollar, (v) that has entered into or will enter into a “derivative forward agreement” or a “synthetic disposition arrangement” with respect to the Resale Shares, or (vi) that receives dividends on Resale Shares under or as part of a “dividend rental arrangement”, as defined in the Tax Act. Any such holder should consult its own tax advisor with respect to an investment in the Resale Shares.
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Additional considerations, not discussed herein, may be applicable to a Holder that is a corporation resident in Canada and is (or does not deal at arm’s length with a corporation resident in Canada for purposes of the Tax Act that is), or becomes, controlled by a non-resident person or a group of non-resident persons (comprised of any combination of non-resident corporations, non-resident individuals or non-resident trusts) for purposes of the “foreign affiliate dumping” rules in section 212.3 of the Tax Act. Such Holders should consult their tax advisors with respect to the consequences of acquiring Resale Shares.
This summary is based upon the provisions of the Tax Act and the regulations thereunder in force as of the date hereof, all specific proposals to amend the Tax Act and the regulations thereunder that have been publicly and officially announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and counsel’s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “CRA”), published in writing by it prior to the date hereof. This summary assumes the Proposed Amendments will be enacted in the form proposed. However, no assurance can be given that the Proposed Amendments will be enacted in their current form, or at all.
This summary is not exhaustive of all possible Canadian federal income tax considerations and, except for the Proposed Amendments, does not take into account or anticipate any changes in the law or any changes in the CRA’s administrative policies and assessing practices, whether by legislative, governmental or judicial action or decision, nor does it take into account or anticipate any other federal or any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular Holder, and no representations with respect to the income tax consequences to any Holder are made. Consequently, Holders should consult their own tax advisors with respect to the tax consequences applicable to them, having regard to their own particular circumstances.
Currency Conversion
Generally, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of the Resale Shares must be converted into Canadian dollars. Amounts denominated in any other currency must be converted into Canadian dollars using the rate of exchange quoted by the Bank of Canada on the day the amount first arose, or such other rate of exchange as is acceptable to the CRA. As a result, the amount of dividends required to be included in the income of, and capital gains or capital losses realized by, a Holder may be affected by fluctuations in the Canadian dollar/United States dollar exchange rate.
Taxation of Resident Holders
The following portion of this summary applies to Holders (as defined above) who, for the purposes of the Tax Act, are or are deemed to be resident in Canada at all relevant times (herein, “Resident Holders”) and this portion of the summary only addresses such Resident Holders. Certain Resident Holders who might not be considered to hold their Resale Shares as capital property may, in certain circumstances, be entitled to make the irrevocable election permitted by subsection 39(4) of the Tax Act to have them and any other “Canadian security” (as defined in the Tax Act) be treated as capital property for the taxation year of the election and in all subsequent taxation years. Resident Holders contemplating such election should consult their own tax advisors for advice as to whether it is available and, if available, whether it is advisable in their particular circumstances.
Taxation of Dividends
A Resident Holder will be required to include in computing income for a taxation year any dividends received, or deemed to be received, in the year by the Resident Holder on the Resale Shares. In the case of a Resident Holder that is an individual (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable under the Tax Act to taxable dividends received from taxable Canadian corporations, including the enhanced gross-up and dividend tax credit provisions where the Company designates the dividend as an “eligible dividend” in accordance with the provisions of the Tax Act. There may be restrictions on the ability of the Company to designate any particular dividend as an “eligible dividend”.
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A dividend received or deemed to be received by a Resident Holder that is a corporation must be included in computing its income but will generally be deductible in computing the corporation’s taxable income for that taxation year, subject to all of the rules and restrictions under the Tax Act in that regard. In certain circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received by a Resident Holder that is a corporation as proceeds of disposition or a capital gain. A corporation that is a “private corporation” or a “subject corporation” (each as defined in the Tax Act), generally will be liable to pay an additional tax (refundable under certain circumstances) under Part IV of the Tax Act on dividends received or deemed to be received on the Resale Shares in a year to the extent such dividends are deductible in computing its taxable income for the year.
Disposition of Resale Shares
A Resident Holder who disposes, or is deemed to dispose, of Resale Shares generally will realize a capital gain (or capital loss) equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base to the Resident Holder of such Resale Shares, as the case may be, immediately before the disposition or deemed disposition. The adjusted cost base to a Resident Holder of a Resale Share will be determined by averaging the cost of that Resale Share with the adjusted cost base (determined immediately before the acquisition of the Resale Share) of all other Resale Shares held as capital property at that time by the Resident Holder. The taxation of capital gains and losses is generally described below under the heading “Capital Gains and Capital Losses”.
Capital Gains and Capital Losses
Generally, a Resident Holder is required to include in computing income for a taxation year one-half of the amount of any capital gain (a “taxable capital gain”) realized by the Resident Holder in such taxation year. Subject to and in accordance with the rules contained in the Tax Act, a Resident Holder is required to deduct one-half of the amount of any capital loss (an “allowable capital loss”) realized in a particular taxation year against taxable capital gains realized by the Resident Holder in the year. Allowable capital losses in excess of taxable capital gains realized in a particular taxation year may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances described in the Tax Act.
The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition or deemed disposition of a Resale Share may be reduced by the amount of any dividends received or deemed to have been received by such Resident Holder on such shares, to the extent and under the circumstances described in the Tax Act. Similar rules may apply where a Resident Holder that is a corporation is a member of a partnership or a beneficiary of a trust that owns Resale Shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant should consult their own tax advisors.
A Resident Holder that is throughout the relevant taxation year a “Canadian-controlled private corporation” or a “substantive CCPC” (both as defined in the Tax Act) may be liable to pay an additional tax (refundable in certain circumstances) on certain investment income, including amounts in respect of net taxable capital gains and dividends or deemed dividends that are not deductible in computing such Resident Holder’s taxable income. Such Resident Holders should consult their own tax advisors.
Alternative Minimum Tax
Capital gains realized and dividends received or deemed to be received by a Resident Holder that is an individual or a trust, other than certain specified trusts, may give rise to alternative minimum tax under the Tax Act. Resident Holders should consult their own tax advisors in this regard.
Taxation of Non-Resident Holders
The following portion of this summary is generally applicable to Holders who, for the purposes of the Tax Act and at all relevant times: (i) are neither resident nor deemed to be resident in Canada, and (ii) do not use or hold Resale Shares in the course of business carried on or deemed to be carried on in Canada. Holders who meet all of the foregoing requirements are referred to herein as “Non-Resident Holders”, and this portion of the summary only addresses such Non-Resident Holders. Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere. Such Non-Resident Holders should consult their own tax advisors.
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Receipt of Dividends
Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder by the Company are subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividend unless reduced by the terms of an applicable tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident. For example, under the Canada-United States Tax Convention (1980), as amended (the “Treaty”), the rate of withholding tax on dividends paid or credited to a Non-Resident Holder who is resident in the U.S. for purposes of the Treaty and entitled to full benefits under the Treaty (a “U.S. Holder”) is generally reduced to 15% of the gross amount of the dividend (or 5% in the case of a U.S. Holder that is a company beneficially owning at least 10% of the Company’s voting shares). Non-Resident Holders should consult their own tax advisors in this regard.
Disposition of Resale Shares
A Non-Resident Holder generally will not be subject to tax under the Tax Act in respect of a capital gain realized on the disposition or deemed disposition of a Resale Share unless such Resale Share constitutes “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty or convention.
Provided the subordinate voting shares are listed on a “designated stock exchange”, as defined in the Tax Act (which currently includes the Cboe Canada and Nasdaq) at the time of disposition, the Resale Shares will generally not constitute taxable Canadian property of a Non-Resident Holder at that time, unless at any time during the 60-month period immediately preceding the disposition the following two conditions are satisfied concurrently: (i) (a) the Non-Resident Holder; (b) persons with whom the Non-Resident Holder did not deal at arm’s length; (c) partnerships in which the Non-Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; or (d) any combination of the persons and partnerships described in (a) through (c), owned 25% or more of the issued shares of any class or series of shares of the Company; and (ii) more than 50% of the fair market value of the Resale Shares was derived directly or indirectly from one or any combination of: real or immovable property situated in Canada, “Canadian resource properties”, “timber resource properties” (each as defined in the Tax Act), and options in respect of, or interests in or for civil law rights in, such properties. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, the Resale Shares may be deemed to be taxable Canadian property. Non-Resident Holders should consult their own tax advisors as to whether their Resale Shares constitute taxable Canadian property in their particular circumstances.
Even if the Resale Shares are taxable Canadian property of a Non-Resident Holder, such Non-Resident Holder may be exempt from tax under the Tax Act on the disposition of such Resale Shares by virtue of an applicable income tax treaty or convention. In cases where a Non-Resident Holder disposes, or is deemed to dispose, of a Resale Share that is taxable Canadian property of that Non-Resident Holder, and the Non-Resident Holder is not entitled to an exemption from tax under the Tax Act or pursuant to the terms of an applicable income tax treaty or convention, the consequences under the heading “Certain Canadian Federal Income Tax Considerations – Taxation of Resident Holders – Capital Gains and Capital Losses” will generally be applicable to such disposition. Non-Resident Holders who may hold Resale Shares as taxable Canadian property should consult their own tax advisors.
EXPENSES
The following table sets forth those expenses payable by us in connection with the subordinate voting shares being registered, other than underwriting discounts and commissions. All of the amounts shown are estimates, except the SEC registration fee. We will pay fees and expenses incurred by us incident to the registration of the securities. If any subordinate voting shares are sold, the selling securityholders will pay any brokerage commissions and/or similar charges incurred for the sale of such shares.
| SEC registration fee | $ | 395.88 | (1) | |
| Legal fees and expenses | 25,000 | |||
| Accounting fees and expenses | 35,000 | |||
| Miscellaneous | 10,000 | |||
| Total | $ | 70,000 |
| (1) | Previously paid (including by appropriate fee registration offsets) with the filing of our registration statement on Form S-3 of which this prospectus forms a part. |
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Certain legal matters related to the Company’s securities offered by this prospectus will be passed upon on the Company’s behalf by MLT Aikins LLP, with respect to matters of Canadian law. Katten Muchin Rosenman LLP is U.S. counsel for the Company in connection with this offering. In addition, certain legal matters in connection with any offering of securities will 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, by counsel that we will name in the applicable prospectus supplement.
The consolidated financial statements of the Company as of December 31, 2025 and December 31, 2024, and for each of the two years in the period ended December 31, 2025, incorporated by reference herein have been so incorporated in reliance on the report of Davidson & Company LLP, an independent registered public accounting firm, given on their authority as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and does not contain all the information set forth in the registration statement. Whenever a reference is made in this prospectus to any of our contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the registration statement or the exhibits to the reports or other documents incorporated by reference in this prospectus for a copy of such contract, agreement or other document. We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our public filings are available to the public on the SEC’s web site at http://www.sec.gov.
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INCORPORATION OF INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with them which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this prospectus and the termination of this offering (other than Current Reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items, unless otherwise indicated therein):
| ● | our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026; and |
| ● | the description of our securities registered pursuant to Section 12 of the Exchange Act contained in Exhibit 4.18 to our Annual Report Form 20-F for the fiscal year ended December 31, 2025, filed with the SEC on September 16, 2024, as updated by any amendment or report filed for the purpose of updating such description, including the section of this prospectus titled “Description of Share Capital.” |
We will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with this prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be directed to:
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario, M5C 1T4
(818) 280-9758
A statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of such a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that was required to be stated or that was necessary to make a statement not misleading in light of the circumstances in which it was made. You should not assume that the information in this prospectus or in the documents incorporated by reference is accurate as of any date other than the date of those respective documents.
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Up to 1,293,746
Subordinate Voting Shares
Digi Power X Inc.
Prospectus
, 2026
PART
II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities being registered hereby.
| SEC registration fee | $ | 103,970.88 | (1) | |
| Printing expenses | (2) | |||
| Legal fees and expenses | (2) | |||
| Accounting fees and expenses | (2) | |||
| Transfer agent fees and expenses | (2) | |||
| Warrant agent fees and expenses | (2) | |||
| Miscellaneous | (2) | |||
| Total | $ | (2) |
| (1) | In accordance with Rule 415(a)(6), includes certain fees previously paid in respect of unsold securities previously registered under the registrant’s registration statements on Form F-1 (File No. 333-271176) and Form F-10 (File No. 333-282583), as further described in the Filing Fee Table included as Exhibit 107 hereto. |
| (2) | The applicable prospectus supplement will set forth the estimated aggregate amount of expenses payable with respect to any offering of securities. |
Item 15. Indemnification of Directors and Officers
Under the BCBCA, the Company may indemnify a present or former director or officer of the Company, a director or officer of another corporation that at the time the corporation is or was an affiliate of the Company or who, at the request of the Company, is or was a director or officer or holds a position equivalent to that of, a director or officer of a corporation, partnership, trust, joint venture or other unincorporated entity, against all costs, charges and expenses, including legal and other fees, as well as any judgments, penalties, fines or amounts paid to settle a legal proceeding or investigative action, incurred by the individual in respect of any legal proceeding or investigative action, whether current, threatened, pending or completed, in which the individual is involved because of that association with the Company or other entity. The Company may not indemnify such an individual if the indemnity or payment is prohibited by the Company’s memorandum of articles and unless the individual acted honestly and in good faith with a view to the best interests of the Company, or, as the case may be, to the best interests of the other entity for which the individual acted as a director or officer or in a similar capacity at the Company’s request and in the case of a proceeding other than a civil proceeding the individual had reasonable grounds for believing that the individual’s conduct was lawful. The Company may advance moneys reasonably incurred to an individual described above for the costs, charges and expenses, including legal and other fees, of a proceeding described above; however, the individual shall provide the Company with a written undertaking that should the payment of costs, charges and expenses of a proceeding be determined to be prohibited under the BCBCA, the individual shall repay the moneys.
The articles of the Company provide that the Company shall indemnify a director or former director of the Company and their heirs and legal representatives against all costs, charges and expenses, including legal and other fees, as well as any judgments, penalties, fines or amounts paid to settle a legal proceeding or investigative action, incurred by the individual in respect of any legal proceeding or investigative action. The articles of the Company also provide that the Company may purchase and maintain such insurance for the benefit of a director, officer, employee or agent of the Company, a former director, officer, employee or agent of the Company, an individual who at the request of the Company is or was a director, officer, employee or agent of a corporation or of a partnership, joint venture or other unincorporated entity or an individual who at the request of the Company holds or held a position equivalent to that of a director or officer of a partnership, joint venture or other unincorporated entity, against any liability incurred by the individual, in the individual’s capacity set forth in this paragraph.
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The Company maintains directors’ and officers’ liability insurance that insures directors and officers for losses as a result of claims against the directors and officers of the Company in their capacity as directors and officers and also reimburse the Company for payments made pursuant to the indemnity provisions under the articles of the Company and the BCBCA.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, or otherwise, the Company has been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company 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 Company 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.
Item 16. Exhibits
| * | To be filed by amendment or incorporated by reference in connection with the offering of securities, if applicable. |
| ** | Certain confidential information has been redacted pursuant to Items 601(a)(6) and 601(b)(10)(iv) of Regulation S-K. The Company will furnish supplementally a copy of any redacted information to the SEC upon request. |
| *** | To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939, if applicable. |
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Item 17. Undertakings
The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
| (ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is a part of the registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
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| (4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| (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 of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| (5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (6) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or 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. |
| (7) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange 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. |
| (8) | The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act. |
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Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Miami, State of Florida on April 9, 2026.
| DIGI POWER X INC. | ||
| By: | /s/ Michel Amar | |
| Michel Amar | ||
| Chief Executive Officer | ||
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michel Amar and Paul Ciullo, or either of them individually, as the undersigned’s true and lawful attorney-in- fact and agents, with full power of substitution and resubstitution for such person and in such person’s name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments, exhibits thereto, and other documents in connection therewith to this Registration Statement and any later registration statement filed by the registrant under Rule 462(b) of the Securities Act of 1933, which relates to this Registration Statement) and to file the same with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact and agent, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Michel Amar | Chief Executive Officer and Chairman | April 9, 2026 | ||
| Michel Amar | (Principal Executive Officer) | |||
| /s/ Paul Ciullo | Chief Financial Officer | April 9, 2026 | ||
| Paul Ciullo | (Principal Financial Officer and Principal Accounting Officer) | |||
| /s/ Alec Amar | President and Director | April 9, 2026 | ||
| Alec Amar | ||||
| /s/ Ajay Gupta | Director | April 9, 2026 | ||
| Ajay Gupta | ||||
| /s/ Adam Rossman | Director | April 9, 2026 | ||
| Adam Rossman | ||||
| /s/ Gerard Rotonda | Director | April 9, 2026 | ||
| Gerard Rotonda |
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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 undersigned, the duly authorized representative in the United States of Digi Power X Inc., has signed this Registration Statement on this 9th day of April 2026.
| AUTHORIZED U.S. REPRESENTATIVE COGENCY GLOBAL INC. | ||
| By: | /s/ Colleen A. De Vries | |
| Name: | Colleen A. De Vries | |
| Title: | Sr. Vice President on behalf of Cogency Global Inc. | |
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Exhibit 1.2
CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAS BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[****]”.
DIGI POWER X INC.
subordinate voting SHARES
AMENDED AND RESTATED SALES AGREEMENT
April 9, 2026
A.G.P./Alliance Global Partners
590 Madison Avenue, 28th Floor
New York, New York 10022
Ladies and Gentlemen:
Digi Power X Inc., a Canadian company incorporated under the British Columbia Business Corporations Act (the “Company”), confirms that this agreement (this “Agreement”) with A.G.P./Alliance Global Partners (the “Sales Agent”), amends and restates that certain Sales Agreement entered into by and between the Company and the Sales Agent dated May 30, 2025 (the “Prior Agreement”), and further confirms as follows:
1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell to or through the Sales Agent, acting as agent or principal, the Company’s subordinate voting shares, without par value (the “SV Shares”), subject to the limitations set forth in Section 3(b) hereof (the “Placement Shares”). The issuance and sale of SV Shares to or through the Sales Agent will be effected pursuant to the Registration Statement (as defined below) filed by the Company and which will have been declared effective under the Securities Act (as defined below) by the U.S. Securities and Exchange Commission (the “Commission”) prior to any such sale of the SV Shares hereunder.
In accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Securities Act”), with the Commission, the Company filed a shelf registration statement on Form S-3 , which includes (i) a base prospectus (the “Base Prospectus”), relating to certain securities, including the SV Shares, to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange Act”), and (ii) a prospectus supplement specifically relating to the offering of SV Shares pursuant to this Agreement (the “ATM Prospectus Supplement” and, together with the Base Prospectus and the documents incorporated by reference in the Base Prospectus and the ATM Prospectus Supplement, the “ATM Prospectus”). Upon request by the Sales Agent, the Company will furnish to the Sales Agent, for use by the Sales Agent, copies of the ATM Prospectus relating to the Placement Shares (as defined below). Except where the context otherwise requires, such registration statement, as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of the Securities Act, including all documents filed as a part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act or deemed to be a part of such registration statement pursuant to Rule 430B or 462(b) under the Securities Act, is herein called the “Registration Statement.” The Base Prospectus, including all documents incorporated therein by reference (to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) under the Securities Act)), and the ATM Prospectus, including all documents incorporated therein by reference (to the extent such information has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) under the Securities Act)), each of which is included in and form a part of the Registration Statement, as it or they may be supplemented from time to time by any additional prospectus supplement, in the form in which such prospectus and/or ATM Prospectus have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any “issuer free writing prospectus” (“Issuer Free Writing Prospectus”), as defined in Rule 433 under the Securities Act (“Rule 433”), relating to the Placement Shares (as defined below) that (i) is required to be filed with the Commission by the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to either the Commission’s Electronic Data Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Applications (collectively, “EDGAR”).
2. Placements. Each time that the Company wishes to issue and sell the SV Shares through the Sales Agent, hereunder (each, a “Placement”), it will notify the Sales Agent by email notice (or other method mutually agreed to in writing by the parties) (each such notice, a “Placement Notice”) containing the parameters in accordance with which it desires the Placement Shares to be sold, which at a minimum shall include the maximum number or amount of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the number or amount of Placement Shares that may be sold in any one Trading Day (as defined in Section 3) and any minimum price below which sales may not be made, a form of which containing such minimum sales parameters is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 2 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the Sales Agent set forth on Schedule 2, as such Schedule 2 may be amended from time to time in writing (including by e-mail). The Placement Notice shall be effective upon receipt by the Sales Agent unless and until (i) in accordance with the notice requirements set forth in Section 4, the Sales Agent declines to accept the terms contained therein for any reason, in its sole discretion (ii) the entire amount of the Placement Shares has been sold, (iii) in accordance with the notice requirements set forth in Section 4, the Company suspends or terminates the Placement Notice for any reason, in its sole discretion, (iv) the Company issues a subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice, or (v) the Agreement has been terminated under the provisions of Section 11 herein. The amount of any discount, commission or other compensation to be paid by the Company to the Sales Agent in connection with the sale of the Placement Shares through the Sales Agent, as agent, shall be as set forth in Schedule 3. It is expressly acknowledged and agreed that neither the Company nor the Sales Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Sales Agent and the Sales Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control with respect to the matters covered thereby. Each of the Company and Sales Agent hereby agrees and acknowledges that all sales and solicitations of sales of Placement Shares by the Sales Agent shall be made solely in the United States, and no sales or solicitations of sales of Placement Shares by the Sales Agent shall be done in Canada or through the facilities of Cboe Canada.
3. Sale of Placement Shares by the Sales Agent.
(a) Subject to the terms and conditions herein set forth, upon the Company’s issuance of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Sales Agent, as agent for the Company, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state, provincial and federal laws, rules and regulations and the rules of The Nasdaq Capital Market (the “Exchange”), for the period specified in the Placement Notice, to sell such Placement Shares up to the number or amount specified by the Company in, and otherwise in accordance with the terms of such Placement Notice. If acting as agent hereunder, the Sales Agent will provide written confirmation to the Company (including by email correspondence to each of the individuals of the Company set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number or amount of Placement Shares sold on such day, the volume-weighted average price of the Placement Shares, the compensation payable by the Company to the Sales Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Sales Agent (as set forth in Section 5(a)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Sales Agent may sell Placement Shares by any method permitted by applicable law and deemed thereunder to be an “at the market” offering, including, without limitation, sales made directly on the Exchange, on any other existing trading market for the SV Shares or to or through a market maker. Subject to the terms of a Placement Notice, the Sales Agent may also sell Placement Shares by any other method permitted by law, including but not limited to, in negotiated transactions with the Company’s prior written consent. The Placement Shares are to be sold by the Sales Agent on a daily basis or otherwise as shall be agreed to by the Company and the Sales Agent on any day that is a Trading Day for the Exchange (other than a day on which the Exchange is scheduled to close prior to its regular weekday closing time). The gross sales price of the Placement Shares sold under this Section 3(a) shall be the market price for the Placement Shares sold by the Sales Agent under this Section 3(a) at the time of such sale. The Company acknowledges and agrees that (i) there can be no assurance that the Sales Agent will be successful in selling Placement Shares, (ii) the Sales Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Sales Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Sales Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Sales Agent and the Company in writing and expressly set forth in a Placement Notice. For the purposes hereof, “Trading Day” means any day on which the SV Shares are purchased and sold on the principal market on which the SV Shares are listed or quoted.
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(b) Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate number or gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of: (i) the number or dollar amount of SV Shares registered and available for issuance pursuant to the ATM Prospectus that forms a part of the Registration Statement pursuant to which the offering hereunder is being made, (ii) the number of authorized but unissued and unreserved SV Shares, (iii) the number or dollar amount of SV Shares permitted to be offered and sold by the Company under Form S-3 (including General Instruction I.B.6. of Form S-3, if and for so long as applicable), (iv) the number or dollar amount of SV Shares authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Sales Agent in writing, or (v) the number or dollar amount of SV Shares for which the Company has filed the ATM Prospectus or other prospectus supplement specifically relating to the offering of the Placement Shares pursuant to this Agreement. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Sales Agent in writing. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge and agree that compliance with the limitations set forth in this Section 3(b) on the number or dollar amount of Placement Shares that may be issued and sold under this Agreement from time to time shall be the sole responsibility of the Company, and that the Sales Agent shall have no obligation in connection with such compliance.
(c) During the term of this Agreement, neither the Sales Agent nor any of its affiliates or subsidiaries shall engage in (i) any short sale of any security of the Company or (ii) any sale of any security of the Company that the Sales Agent does not own or any sale which is consummated by the delivery of a security of the Company borrowed by, or for the account of, the Sales Agent. During the term of this Agreement and notwithstanding anything to the contrary herein, the Sales Agent agrees that in no event will the Sales Agent or its affiliates engage in any market making, bidding, stabilization or other trading activity with regard to the SV Shares or related derivative securities if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Exchange Act.
4. Suspension of Sales.
(a) The Company or the Sales Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by email correspondence to each of the individuals of the other party set forth on Schedule 2), suspend any sale of Placement Shares for a period of time (a “Suspension Period”); provided, however, that such suspension shall not affect or impair either party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice (including with respect to Placement Shares that have not yet settled). Each of the parties agrees that no such notice under this Section 4 shall be effective against the other unless notice is sent to one of the individuals named on Schedule 2 hereto in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 2, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply), as such schedule may be amended from time to time. During a Suspension Period, the Company shall not issue any Placement Notices and the Sales Agent shall not sell any Placement Shares hereunder. The party that issued a suspension notice shall notify the other party in writing of the Trading Day on which the Suspension Period shall expire not later than twenty-four (24) hours prior to such Trading Day.
(b) Notwithstanding any other provision of this Agreement, during any period in which the Company is in possession of material non-public information regarding the Company, the Company and the Sales Agent agree that (i) no sale of Placement Shares will take place, (ii) the Company shall not request the sale of any Placement Shares, and (iii) the Sales Agent shall not be obligated to sell or offer to sell any Placement Shares.
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5. Settlement.
(a) Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the first (1st) Trading Day (or such earlier day as is industry practice or as is required by law for regular-way trading) following the respective Point of Sale (as defined below), except for any sales effected on days that are not a Business Day in Canada, in which case settlement for sales of Placement Shares will occur on the second (2nd) Trading Day following the respective Point of Sale (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to (i) the aggregate sales price received by the Sales Agent, after deducting the Sales Agent’s discount, commission or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to the Sales Agent hereunder pursuant to Section 7(g) (Expenses) hereof and (iii) any documented transaction fees, trading expenses or execution fees imposed by any clearing organization or any governmental or self-regulatory organization and any other fees or expenses incurred by the Sales Agent in respect of such sales, including, but not limited to, up to $0.002 per Placement Share.
(b) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Sales Agent’s or its designee’s account (provided the Sales Agent shall have given the Company written notice of such designee prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System (“DWAC”) or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered SV Shares in good deliverable form. On each Settlement Date, the Sales Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Sales Agent shall be responsible for providing DWAC instructions or other instructions for delivery by other means with regard to the transfer of the Placement Shares being sold. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver duly authorized Placement Shares on a Settlement Date, or such other time as mutually agreed upon, through no fault of the Sales Agent, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 9(a) (Indemnification and Contribution) hereto, the Company will (i) hold the Sales Agent, its directors, officers, members, partners, employees and agents of the Sales Agent, each broker dealer affiliate of the Sales Agent, and each person, if any, who (A) controls the Sales Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (B) is controlled by or is under common control with the Sales Agent (each, a “Sales Agent Affiliate”), and the Sales Agent’s clearing organization, harmless against any loss, claim, damage, or reasonable and documented expense (including reasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Sales Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.
6. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the Sales Agent that as of each Applicable Time (as defined in Section 24(a)), unless such representation, warranty or agreement specifies a different time or times:
(a) Compliance with Registration Requirements. As of each Applicable Time other than the date of this Agreement, the Registration Statement and any Rule 462(b) Registration Statement have been declared effective by the Commission under the Securities Act, and the Company is and continues to be eligible to use such Registration Statement. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information related to the Registration Statement and the Prospectus. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in effect and, to the knowledge of the Company, no proceedings for such purpose have been instituted, or are pending or are contemplated or threatened by the Commission. The Registration Statement and, assuming no act or omission on the part of the Sales Agent that would make such statements untrue, the offer and sale of the Placement Shares as contemplated hereby meet the requirements of applicable laws to constitute an “at the market offering” and comply in all material respects with any requirements under such laws. In the section entitled “Plan of Distribution” in the ATM Prospectus, the Company has named A.G.P./Alliance Global Partners as an agent that the Company has engaged in connection with the transactions contemplated by this Agreement. The Company was not, at the time of the filing of the Registration Statement and is not, an “ineligible issuer” as defined in Rule 405 under the Securities Act.
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(b) No Misstatement or Omission. The Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, complied or will comply in all material respects with the Securities Act. The Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or supplement, complied or will comply in all material respects with the Securities Act. The Registration Statement and any post-effective amendment thereto, at the time it became or becomes effective, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date, did not and, as of each Point of Sale and each Settlement Date, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to the Sales Agent furnished to the Company in writing by the Sales Agent expressly for use therein. “Point of Sale” means, for a Placement, the time at which an acquiror of Placement Shares entered into a contract, binding upon such acquiror, to acquire such Placement Shares.
(c) Offering Materials Furnished to the Sales Agent. Copies of the Registration Statement, the Prospectus, and all amendments or supplements thereto and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement, have been delivered, or are publicly available through EDGAR, to the Sales Agent. Each Prospectus delivered to the Sales Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the version of such Prospectus filed with the Commission via EDGAR, except to the extent permitted by Regulation S-T.
(d) Distribution of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the completion of the Sales Agent’s distribution of the Placement Shares, any offering material in connection with the offering and sale of the Placement Shares other than the Prospectus or the Registration Statement.
(e) The Sales Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal, and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal, provincial or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally, and subject to general principles of equity. The Company has full corporate power and authority to enter into this Agreement and to authorize, issue and sell the Placement Shares as contemplated by this Agreement. This Agreement conforms in all material respects to the descriptions thereof in the Registration Statement and the Prospectus.
(f) Authorization of the Placement Shares. The Placement Shares, when issued and paid for in accordance with this Agreement, will be validly issued, fully paid and nonassessable, will be issued in compliance with federal, state and provincial securities laws, and any applicable Canadian laws, and will be free of preemptive, registration or similar rights, and will conform to the description of the SV Shares contained in the Registration Statement and the Prospectus.
(g) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale in connection with the offering contemplated by this Agreement. No person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Placement Shares hereunder, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated hereby or otherwise.
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(h) No Material Adverse Change. Except as otherwise disclosed in the Registration Statement and the Prospectus, subsequent to the respective dates as of which information is given in the Prospectus: (i) there has been no material adverse change in the business, properties, prospects, operations, condition (financial or otherwise) or results of operations of the Company (any such change is called a “Material Adverse Change”), which, individually or in the aggregate, has had or would reasonably be expected to result in a Material Adverse Change; (ii) the Company has not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company; (iv) no officer or director of the Company has resigned from any position with the Company; and (v) there has not been any Material Adverse Change in the Company’s long-term debt.
(i) Independent Accountants. To the knowledge of the Company, Davidson & Company LLP, whose report is filed with the Commission as part of the Company’s most recent Annual Report on Form 10-K filed with the Commission and incorporated by reference in the Registration Statement and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Public Company Accounting Oversight Board.
(j) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement and the Prospectus, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods then ended. Such financial statements have been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules are required to be included in or incorporated in the Registration Statement. Each of the Registration Statement and the Prospectus discloses all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement and the Prospectus, (a) neither the Company nor any of its direct and indirect subsidiaries, including each entity disclosed or described in the Registration Statement and the Prospectus as being a subsidiary of the Company (each, a “Subsidiary” and, collectively, the “Subsidiaries”), has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its capital shares, (c) there has not been any change in the capital shares of the Company or any of its Subsidiaries required to be disclosed in any SEC Report, or, other than in the course of business, any grants under any share compensation plan, and (d) there has not been any material adverse change in the Company’s long-term or short-term debt.
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(k) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement or the Prospectus was included therein by the Company without a reasonable basis or has been disclosed by the Company other than in good faith.
(l) Statistical and Marketing-Related Data. The statistical and market-related data included in each of the Registration Statement and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
(m) XBRL. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(n) Incorporation and Good Standing of the Company. The Company is duly incorporated or otherwise organized and validly existing under the laws of British Columbia, Canada. The Company has requisite corporate power to carry on its business as described in the Prospectus. The Company is duly qualified to transact business and is in good standing in all jurisdictions in which the conduct of its business requires such qualification; except where the failure to be so qualified or to be in good standing would not result in a Material Adverse Change. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the most recently ended fiscal year and other than (i) those subsidiaries not required to be listed on Exhibit 21.1 by Item 601 of Regulation S-K under the Exchange Act and (ii) those subsidiaries, if any, formed since the last day of the most recently ended fiscal year. Each subsidiary is a corporation or limited liability company duly incorporated or formed and validly existing under the laws of the jurisdiction of its incorporation or formation and is in good standing under such laws. Each of the subsidiaries has requisite corporate power to carry on its business as described in the Prospectus. Each of the subsidiaries is duly qualified to transact business and is in good standing in all jurisdictions in which the conduct of its business requires such qualification; except where the failure to be so qualified or to be in good standing would not result in a Material Adverse Change.
(o) Share Capital Matters. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The authorized SV Shares conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. The offers and sales of the outstanding SV Shares were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements. The description of the Company’s share option, share bonus and other share plans or arrangements, and the options or other rights granted thereunder, contained in the Registration Statement and the Prospectus, accurately and fairly present, in all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.
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(p) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. The Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby or by the Registration Statement and the Prospectus (including the issuance and sale of the Placement Shares and the use of the proceeds from the sale of the Placement Shares as described in the Prospectus under the caption “Use of Proceeds”) will not (A) result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity (as defined below) to which the Company is subject as of the date hereof, (B) conflict with, result in any violation or breach of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) (a “Default Acceleration Event”) of, any agreement, lease, credit facility, debt, note, bond, mortgage, indenture or other instrument (“Contract”) or obligation or other understanding to which the Company or any subsidiary is a party or by which any property or asset of the Company or any subsidiary is bound or affected, except to the extent that such conflict, default, or Default Acceleration Event is not reasonably likely to result in a Material Adverse Change, or (C) result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company’s Memorandum and Articles of Association (as the same may be amended or restated from time to time) (the “Charter”) or other equivalent organizational or governing documents, except in the case of each of clauses (A) and (B), as disclosed in the Registration Statement and the Prospectus or to the extent that such conflict, default, or Default Acceleration Event would not have or would not reasonably be expected to result in a Material Adverse Change. The Company is not in violation, breach or default under the Charter or other equivalent organizational or governing documents. Neither the Company nor, to its knowledge, any other party is in violation, breach or default of any Contract that has resulted in or could reasonably be expected to result in a Material Adverse Change. Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the performance of the Company of the transactions herein contemplated has been obtained or made and is in full force and effect, except (i) with respect to any Applicable Time at which the Sales Agent would not be able to rely on Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority, Inc. (“FINRA”), such additional steps as may be required by FINRA, (ii) filings with the Commission required under the Securities Act or the Exchange Act, or filings with the Exchange pursuant to the rules and regulations of the Exchange, in each case that are contemplated by this Agreement to be made on or after the date of this Agreement, and (iii) such additional steps as may be necessary to qualify the Placement Shares for sale by the Sales Agent under state securities or Blue Sky laws.
(q) No Material Actions or Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending or, to the Company’s knowledge, threatened against, or involving the Company or, to the Company’s knowledge, any executive officer or director, which has not been disclosed in the Registration Statement and the Prospectus that is required to be disclosed, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.
(r) Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Change.
(s) Compliance with Applicable Laws. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including, without limitation, all foreign, federal, state, provincial and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case of (i), (ii) and (iii) as would not have or reasonably be expected to result in a Material Adverse Effect.
(t) [Reserved].
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(u) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local, Canadian, provincial or other foreign regulatory authorities necessary to conduct their respective businesses as described in the Registration Statement, the General Disclosure Package and the Prospectus, except where the failure to possess such certificates, authorizations or permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(v) Tax Law Compliance. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company (i) has filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (ii) has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company. The provisions for taxes payable, if any, shown on the consolidated financial statements filed with or as part of or incorporated by reference in the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Other than as disclosed in the Registration Statement and the Prospectus, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company. There are no tax liens against the assets, properties or business of the Company. The term “taxes” means all federal, provincial, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
(w) Company Not an “Investment Company”. The Company is not, and will not be, either after receipt of payment for the Placement Shares or after the application of the proceeds therefrom as described under “Use of Proceeds” in the Registration Statement or the Prospectus, required to register as an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(x) Insurance. The Company carries or is entitled to the benefits of insurance, with reputable insurers, in such amounts and covering such risks which the Company believes are adequate, and all such insurance is in full force and effect. The Company has no reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.
(y) No Price Stabilization or Manipulation. Neither the Company, nor to the knowledge of the Company, any of its directors, officers or controlling persons has taken, directly or indirectly (without giving any effect to the activities of the Sales Agent), any action designed to or that might cause or result in stabilization or manipulation of the price of the SV Shares or of any “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act (“Regulation M”)) with respect to the SV Shares, whether to facilitate the sale or resale of the Placement Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M.
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(z) Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement and the Prospectus that have not been described as required pursuant to the Securities Act.
(aa) Exchange Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Prospectus or any amendment or supplement thereto, at the time they were or hereafter are filed with the Commission under the Exchange Act, complied, and will comply, in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus, at each Point of Sale and each Settlement Date, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(bb) Conformity of Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus conformed or will conform in all material respects to the requirements of the Securities Act on the date of first use, and the Company has complied or will comply with any filing requirements applicable to such Issuer Free Writing Prospectus pursuant to the Securities Act. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein that has not been superseded or modified. The Company has not made any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Sales Agent. The Company has retained in accordance with the Securities Act all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Securities Act.
(cc) Compliance with Environmental Laws. The Company is in material compliance with all foreign, federal, provincial, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to its business (“Environmental Laws”), except where the failure to comply would not, singularly or in the aggregate, result in a Material Adverse Change. To the Company’s knowledge, there has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which would not have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Change.
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(dd) Intellectual Property. The Company owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property Rights”) necessary for the conduct of the business of the Company as described in the Registration Statement and the Prospectus, except as would not be reasonably likely to result in a Material Adverse Change. To the knowledge of the Company, no action or use by the Company necessary for the conduct of its business as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others, except where such action, use, license or fee is not reasonably likely to result in a Material Adverse Change. The Company has not received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 6(dd), reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 6(dd), reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 6(dd), reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement and the Prospectus and are not described therein. The Registration Statement and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company or its subsidiaries has been obtained or is being used by the Company or any of its subsidiaries in violation of any contractual obligation binding on the Company or any such subsidiary or, to the Company’s knowledge, any of its or its subsidiaries’ officers, directors or employees, or otherwise in violation of the rights of any persons, except for violations that would not result in a Material Adverse Change.
(ee) Brokers. The Company is not a party to any contract, agreement or understanding with any person (other than as contemplated by this Agreement) that would give rise to a valid claim against the Company or the Sales Agent for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Placement Shares by the Sales Agent under this Agreement.
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(ff) No Outstanding Loans or Other Indebtedness. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors of the Company, or any of their respective family members, except as disclosed in the Registration Statement and the Prospectus.
(gg) No Reliance. The Company has not relied upon the Sales Agent or legal counsel for the Sales Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.
(hh) Broker-Dealer Status. Neither the Company nor any of its related entities (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of a member” (within the meaning of Article I of the NASD Manual administered by FINRA). To the Company’s knowledge, there are no affiliations or associations between any member of FINRA and any of the Company’s officers, directors or 5% or greater security holders, except as set forth in the Registration Statement.
(ii) Public Float Calculation. At the time the Registration Statement and any Rule 462(b) Registration Statement was or will be filed with the Commission, at the time the Registration Statement and any Rule 462(b) Registration Statement was or will be declared effective by the Commission, and at the time the Company’s most recent Annual Report on Form 10-K was filed with the Commission, the Company met or will meet the then applicable requirements for the use of Form S-3 under the Securities Act. As of the close of trading on the Exchange on the date of this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Rule 405 under the Securities Act) of the Company held by persons other than affiliates of the Company (pursuant to Rule 144 under the Securities Act, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was approximately $149.75 million (calculated by multiplying (x) the price at which the common equity of the Company was last sold on the Exchange on April 8, 2026, 2026 by (y) the number of Non-Affiliate Shares outstanding on April 8, 2026). The Company is not a shell company (as defined in Rule 405) and has never been a shell company.
(jj) FINRA Matters. All of the information provided to the Sales Agent or to counsel for the Sales Agent by the Company, its counsel, its officers and directors and, to the Company’s knowledge, the holders of any securities (debt or equity) or options to acquire any securities of the Company in connection with the offering of the Placement Shares is true and correct and compliant with FINRA’s rules in all material respects, and any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules or NASD Conduct Rules, if any, is true and correct in all material respects. Except as disclosed in the Registration Statement and the Prospectus, (i) to the Company’s knowledge, after due inquiry, there is no officer or director of the Company, (ii) to the Company’s knowledge, there is no beneficial owner of 10% or more of any class of the Company’s securities or (iii) to the Company’s knowledge, there is no beneficial owner of the Company’s unregistered equity securities that were acquired during the 180-day period immediately preceding the date of this Agreement, that is an affiliate or associated person of a FINRA member participating in the offer, issuance and sale of the Placement Shares as contemplated by this Agreement and the Registration Statement and the Prospectus (as determined in accordance with the rules and regulations of FINRA).
(kk) Compliance with Orders. The Company is not in violation of any material judgment, decree, or order of any court, arbitrator or other governmental authority.
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(ll) Sarbanes–Oxley Act. The Company is in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”) that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof.
(mm) Disclosure Controls and Procedures; Internal Controls over Financial Reporting. The Company maintains systems of disclosure controls and “internal controls over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. Since the date of the latest audited financial statements included in the Registration Statement and the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(nn) ERISA. The Company and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company or its “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”). Each “employee benefit plan” established or maintained by the Company or any of its ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. “ERISA Affiliate” means, with respect to the Company, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Code of which the Company is a member.
(oo) Contracts and Agreements. The agreements and documents described in the Registration Statement and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act to be described in the Registration Statement and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, which have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”).
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(pp) Title to Properties. Except as disclosed in the Registration Statement and the Prospectus, the Company has good and marketable title in fee simple to, or has valid rights to lease or otherwise use, all items of real or personal property that are material to the business of the Company, in each case free and clear of all liens, encumbrances, security interests, claims and defects except (i) such liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and (ii) liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties; and all of the leases and subleases material to the business of the Company, and under which the Company holds properties described in the Registration Statement and the Prospectus, are in full force and effect, and the Company has not received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company to the continued possession of the leased or subleased premises under any such lease or sublease, which would result in a Material Adverse Change.
(qq) Foreign Corrupt Practices Act. None of the Company or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA. To the Company’s knowledge, the Company has conducted its business in compliance with the FCPA.
(rr) No Unlawful Contributions or Other Payments. No payments or inducements have been made or given, directly or indirectly, to any federal, provincial or local official or candidate for, any federal, provincial or state office in the United States or foreign offices by the Company or any of its officers or directors, or, to the knowledge of the Company, by any of its employees or agents or any other person in connection with any opportunity, contract, permit, certificate, consent, order, approval, waiver or other authorization relating to the business of the Company, except for such payments or inducements as were lawful under applicable laws, rules and regulations. Neither the Company, nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company, (i) has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any government official or employee from corporate funds; or (iii) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment in connection with the business of the Company.
(ss) Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
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(tt) OFAC. None of the Company or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(uu) Exchange Listing. The SV Shares are registered pursuant to Section 12(b) of the Exchange Act and are currently listed on the Exchange under the trading symbol “DGXX.” Except as disclosed in the Registration Statement and the Prospectus, there is no action pending by the Company or, to the Company’s knowledge, the Exchange to delist the SV Shares from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing. The Company has no intention to delist the SV Shares from the Exchange or to deregister the SV Shares under the Exchange Act. The issuance and sale of the Placement Shares under this Agreement does not contravene the rules and regulations of the Exchange.
(vv) Margin Rules. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds from the issuance, sale and delivery of the Placement Shares as contemplated by this Agreement and as described in the Registration Statement and the Prospectus will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the SV Shares to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
(ww) Underwriter Agreements. The Company is not a party to any agreement with an agent or underwriter for any “at-the-market” or continuous equity transaction other than this Agreement.
(xx) Board of Directors. The qualifications of the persons serving as board members of the Company and the overall composition of the Company’s Board of Directors comply with the applicable requirements of the Exchange Act and the Sarbanes-Oxley Act and the listing rules of the Exchange applicable to the Company. At least one member of the Audit Committee of the Board of Directors of the Company qualifies as an “audit committee financial expert,” as such term is defined under Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the Board of Directors of the Company qualify as “independent,” as defined under the listing rules of the Exchange.
(yy) No Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offer and sale of the Placement Shares hereunder to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.
(zz) No Material Defaults. Neither the Company nor any of its subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred shares or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Change.
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(aaa) Books and Records. The minute books of the Company have been made available to the Sales Agent and counsel for the Sales Agent, and such books (i) contain a substantially complete summary of all meetings and material actions of the board of directors (including each board committee) and shareholders of the Company (or analogous governing bodies and interest holders, as applicable) for the 12 months prior to the date hereof through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes.
(bbb) Regulations. The statements set forth in the Registration Statement and the Prospectus, insofar as they purport to constitute summaries of the federal, provincial, state, local and foreign regulation applicable to the Company’s business as described in the Registration Statement or Prospectus are correct in all material respects and no other such regulations are required to be disclosed in the Registration Statement and the Prospectus which are not so disclosed.
(ccc) Confidentiality and Non-Competitions. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer or prior employer that could reasonably be expected to materially affect his ability to be and act in his respective capacity of the Company or be expected to result in a Material Adverse Change.
(ddd) PFIC Status. The Company believes that it was not a “passive foreign investment company” (“PFIC”) as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended, for the taxable year ended December 31, 2025 and, based on certain estimates of the Company’s gross income and the value of its assets, the intended use of proceeds from the offering and sale of the Placement Shares and the nature of the Company’s business, it expects to not be one for the taxable year ending December 31, 2026.
(eee) CFC Status. The Company was not a “controlled foreign corporation” (“CFC”) as defined in the U.S. Internal Revenue Code of 1986, as amended, for the taxable year ended December 31, 2025 and, based on the Company’s expectations with respect to its shareholders, the Company does not expect to be classified as a CFC for the taxable year ending December 31, 2026.
(fff) Cybersecurity. Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the Company and the Subsidiaries are presently in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of the Company’s or any Subsidiary’s information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”) and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification; (ii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iii) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with commercially reasonable industry standards and practices.
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(ggg) Validity of Choice of Law. The Company has the power to submit and, pursuant to this Agreement, has legally, validly, effectively and irrevocably submitted, to the personal jurisdiction of each the State of New York and United States Federal court sitting in New York County (each, a “New York Court”) and has validly and irrevocably waived any objection to the laying of venue of any suit, action or proceeding brought in any such court; and the Company has the power to designate, appoint and empower, and pursuant to this Agreement, has legally, validly, effectively and irrevocably designated, appointed and empowered, an authorized agent for service of process in any action arising out of or relating to this Agreement, or the offering of the Placement Shares in any New York Court, and service of process effected on such authorized agent will be effective to confer valid personal jurisdiction over the Company as provided in this Agreement.
Any certificate signed by an officer of the Company and delivered to the Sales Agent or to counsel for the Sales Agent pursuant to or in connection with this Agreement shall be deemed to be a representation and warranty by the Company to the Sales Agent as to the matters set forth therein.
The Company acknowledges that the Sales Agent and, for purposes of the opinions to be delivered pursuant to Section 7 hereof, counsel to the Company and counsel to the Sales Agent, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
7. Covenants of the Company. The Company covenants and agrees with the Sales Agent that:
(a) Registration Statement Amendments. After the date of this Agreement and during any period in which the Prospectus relating to any Placement Shares is required to be delivered by the Sales Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), (i) the Company will notify the Sales Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus, other than documents incorporated by reference, has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information; (ii) the Company will prepare and file with the Commission, promptly upon the Sales Agent’s reasonable request, any amendments or supplements to the Registration Statement or Prospectus that, in the Sales Agent’s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Sales Agent (provided, however, that the failure of the Sales Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Sales Agent’s right to rely on the representations and warranties made by the Company in this Agreement, and provided, further, that the only remedy the Sales Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus, other than documents incorporated by reference, relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to the Sales Agent within a reasonable period of time before the filing and the Sales Agent has not reasonably objected thereto (provided, however, that the failure of the Sales Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Sales Agent’s right to rely on the representations and warranties made by the Company in this Agreement, and provided, further, that the only remedy the Sales Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement); (iv) the Company will furnish to the Sales Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (v) the Company will cause each amendment or supplement to the Prospectus, other than documents incorporated by reference, to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) under the Securities Act (without reliance on Rule 424(b)(8) under the Securities Act) or, in the case of any documents incorporated by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed.
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(b) Notice of Commission Stop Orders. The Company will advise the Sales Agent, promptly after it receives notice, or obtains knowledge, of (i) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, (ii) the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, (iii) the initiation of any proceeding for any such purpose or any examination pursuant to Section 8(e) of the Securities Act, or (iv) the Company becoming subject of a proceeding under Section 8A of the Securities Act in connection with the offering of the Placement Shares; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. Until such time as any stop order is lifted, the Sales Agent shall cease making offers and sales under this Agreement.
(c) Delivery of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Sales Agent under the Securities Act with respect to the offer and sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will comply in all material respects with all requirements imposed upon it by the Securities Act, as from time to time in force, and will use commercially reasonable best efforts to file on or before their respective due dates (taking into account any extensions available under the Exchange Act) all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify the Sales Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however, that the Company may delay any such amendment or supplement if, in the reasonable judgment of the Company, it is in the best interests of the Company to do so.
(d) Listing of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Sales Agent under the Securities Act with respect to the offer and sale of the Placement Shares (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act), the Company will use its commercially reasonable efforts to cause the Placement Shares to be listed on the Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions as the Sales Agent reasonably designates and to continue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, that the Company shall not be required in connection therewith to (i) qualify as a foreign corporation or dealer in securities, (ii) execute or file a general consent to service of process in any jurisdiction, or (iii) subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(e) Delivery of Registration Statement and Prospectus. The Company will furnish to the Sales Agent and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Sales Agent may from time to time reasonably request and, at the Sales Agent’s request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document to the Sales Agent to the extent such document is available on EDGAR.
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(f) Earnings Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement of the Company (which need not be audited) covering a 12-month period that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act. The terms “earnings statement” and “make generally available to its security holders” shall have the meanings set forth in Rule 158 under the Securities Act.
(g) Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated in accordance with the provisions of Section 11 hereunder, will pay the following expenses all incident to the performance of its obligations hereunder, including, but not limited to, expenses relating to (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each Prospectus and of each amendment and supplement thereto, (ii) the preparation, issuance and delivery of the Placement Shares, including any share or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Placement Shares to the Sales Agent, (iii) the fees and disbursements of the counsel, accountants and other advisors to the Company in connection with the transactions contemplated by this Agreement; (iv) the qualification of the Placement Shares under securities laws in accordance with the provisions of Section 7(d) of this Agreement, including filing fees (provided, however, that any fees or disbursements of counsel for the Sales Agent in connection therewith shall be paid by the Sales Agent except as set forth in (ix) below), (v) the printing and delivery to the Sales Agent of copies of the Prospectus and any amendments or supplements thereto, and of this Agreement, (vi) the fees and expenses incurred in connection with the listing or qualification of the Placement Shares for trading on the Exchange, (vii) the fees and expenses of the transfer agent or registrar for the SV Shares; (viii) filing fees and expenses, if any, of the Commission and the FINRA Corporate Financing Department (provided, however, that any fees or disbursements of counsel for the Sales Agent in connection therewith shall be paid by the Sales Agent except as set forth in (ix) below) and, (ix) the Company shall reimburse the Sales Agent for its reasonable and documented out-of-pocket costs and expenses (including but not limited to the reasonable fees and documented out-of-pocket costs and expenses of counsel to the Sales Agent) in an amount not to exceed $60,000, provided further that the Company shall reimburse the Sales Agent for its expenses (including but not limited to the reasonable fees and documented out-of-pocket costs and expenses of counsel to the Sales Agent): (i) up to an additional $2,500 per calendar quarter thereafter payable in connection with each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable and excluding the date of this Agreement (and in no event to exceed more than $10,000 per fiscal year); and (ii) up to an additional $10,000 for each additional program “refresh” (filing of a new registration statement, prospectus, or prospectus supplement relating to the Placement Shares and/or an amendment of this Agreement) executed pursuant to this Agreement.
(h) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
(i) Notice of Other Sales. The Company (I) shall provide the Sales Agent notice as promptly as reasonable practicable before it offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any SV Shares (other than Placement Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for SV Shares, or warrants or any rights to purchase or acquire SV Shares, during the period beginning on the fifth (5th) Trading Day immediately prior to the date on which any Placement Notice is delivered to the Sales Agent hereunder and ending on the third (3rd) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the third (3rd) Trading Day immediately following the date of such suspension or termination), and (II) will not directly or indirectly engage in any other “at-the-market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any SV Shares (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for SV Shares, warrants or any rights to purchase or acquire, SV Shares prior to the termination of this Agreement without the prior written consent of the Sales Agent; provided, however, that such notice requirements or restrictions, as the case may be, will not be required in connection with the Company’s issuance or sale of (i) SV Shares, restricted share units, options to purchase SV Shares or other securities, or grants of any of the foregoing, issuable under the Company’s then existing equity incentive plans, or SV Shares issuable upon the exercise of options or vesting other securities, pursuant to any employee or director share option or benefits plan, share ownership plan or dividend reinvestment plan of the Company whether now in effect or hereafter implemented, (ii) SV Shares issuable upon exchange, conversion or redemption of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing (including by email correspondence) to the Sales Agent, and (iii) SV Shares or securities convertible into or exchangeable for SV Shares as consideration for mergers, acquisitions, sale or purchase of assets or other business combinations occurring after the date of this Agreement which are not issued for capital raising purposes.
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(j) Change of Circumstances. The Company will, at any time during a fiscal quarter in which the Company intends to tender a Placement Notice advise the Sales Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document provided to the Sales Agent pursuant to this Agreement.
(k) Due Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence review conducted by the Sales Agent or its agents in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Sales Agent may reasonably request.
(l) Required Filings Relating to Placement of Placement Shares. The Company shall set forth in each Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed by the Company with the Commission in respect of any quarter in which sales of Placement Shares were made by or through the Sales Agent under this Agreement, with regard to the relevant period, the amount of Placement Shares sold to or through the Sales Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Sales Agent with respect to such sales of Placement Shares. To the extent that the filing of a prospectus supplement with the Commission with respect to any sales of Placement Shares becomes required under Rule 424(b) under the Securities Act, the Company agrees that, on or before such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act, which prospectus supplement will set forth, with regard to the relevant period, the amount of Placement Shares sold to or through the Sales Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Sales Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market, which delivery shall be deemed satisfied by the filing of such prospectus supplement with the Commission. The Company shall afford the Sales Agent and its counsel with a reasonable opportunity to review and comment upon, shall consult with the Sales Agent and its counsel on the form and substance of, and shall give due consideration to all such comments from the Sales Agent or its counsel on, any such filing prior to the issuance, filing or public disclosure thereof; provided, however, that the Company shall not be required to submit for review (A) any portion of any periodic or current reports filed with the Commission under the Exchange Act other than the specific disclosure relating to any sales of Placement Shares and (B) any disclosure contained in periodic or current reports filed with the Commission under the Exchange Act if it shall have previously provided the same disclosure for review in connection with a previous filing.
(m) Representation Dates; Certificate. On or prior to the date the first Placement Notice is given hereunder and each time the Company (i) files the Prospectus relating to the Placement Shares or amends or supplements the Registration Statement or the Prospectus relating to the Placement Shares (other than (A) a prospectus supplement filed in accordance with Section 7(l) of this Agreement or (B) a supplement or amendment that relates to an offering of securities other than the Placement Shares) by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of document(s) by reference to the Registration Statement or the Prospectus relating to the Placement Shares; (ii) files an annual report on Form 10-K under the Exchange Act (including any Form 10-K/A containing amended financial information or a material amendment to the previously filed Form 10-K); (iii) files a quarterly report on Form 10-Q under the Exchange Act; or (iv) files a current report on Form 8-K containing amended financial information (other than an earnings release, to “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance with Statement of Financial Accounting Standards No. 144) under the Exchange Act (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”), the Company shall furnish the Sales Agent within three (3) Trading Days after each Representation Date with a certificate, in the form attached hereto as Exhibit 7(m). The requirement to provide a certificate under this Section 7(m) shall be waived for any Representation Date occurring at a time at which no Placement Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date; provided, however, that such waiver shall not apply for any Representation Date on which the Company files its annual report on Form 10-K. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when the Company relied on such waiver and did not provide the Sales Agent with a certificate under this Section 7(m), then before the Company delivers the Placement Notice or the Sales Agent sells any Placement Shares, the Company shall provide the Sales Agent with a certificate, in the form attached hereto as Exhibit 7(m), dated the date of the Placement Notice.
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(n) Legal Opinion. On or prior to the date the first Placement Notice is delivered by the Company hereunder, the Company shall cause to be furnished to the Sales Agent (i) the written opinion and negative assurance of Katten Muchin Rosenman LLP, as U.S. counsel to the Company, or other counsel reasonably satisfactory to the Sales Agent (“U.S. Counsel”) and (ii) the written opinion of Peterson McVicar LLP, as Canadian counsel to the Company, or other counsel reasonably satisfactory to the Sales Agent (“Canadian Counsel”), in each case substantially in the forms previously agreed between the Company and the Sales Agent. Thereafter, within three (3) Trading Days after each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable pursuant to Section 7(m), the Company shall cause to be furnished to the Sales Agent the written opinion and the negative assurance letter of U.S. Counsel and the written opinion of Canadian Counsel substantially in the forms previously agreed between the Company and the Sales Agent, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented. Notwithstanding the foregoing, if U.S. Counsel has previously furnished to the Sales Agent such written opinions and negative assurance of such counsel, and if Canadian Counsel has previously furnished to the Sales Agent such written opinions of such counsel, in each case substantially in the forms previously agreed between the Company and the Sales Agent, then U.S. Counsel and Canadian Counsel may, in respect of any future Representation Date, furnish the Sales Agent with a letter signed by such counsel (each, a “Reliance Letter”) in lieu of such written opinions and negative assurance letter of such counsel (as applicable) to the effect that the Sales Agent may rely on the prior written opinions and negative assurance (as applicable) letter of such counsel (as applicable) delivered pursuant to this Section 7(n) to the same extent as if it were dated the date of such Reliance Letter (except that statements in such prior written opinions and negative assurance letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of such Reliance Letter).
(o) Comfort Letter. On or prior to the date the first Placement Notice is given hereunder and after each subsequent Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(m) for which no waiver is applicable pursuant to Section 7(m), other than a Representation Date under Section 7(m)(iv), unless with respect to a Representation Date under Section 7(m)(iv) the Sales Agent reasonably requests delivery thereof, the Company shall cause its independent accountants to furnish the Sales Agent letters (the “Comfort Letters”), dated the date that the Comfort Letter is delivered, in form and substance reasonably satisfactory to the Sales Agent, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act, the Exchange Act and the rules and regulations of the PCAOB and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to the Sales Agent in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.
(p) Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the SV Shares or (ii) sell, bid for, or purchase SV Shares in violation of Regulation M, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Sales Agent.
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(q) Insurance. The Company shall maintain insurance in such amounts and covering such risks as is reasonable and customary for the business in which it is engaged.
(r) Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that it is not and, after giving effect to the offering and sale of the Placement Shares and the application of proceeds therefrom as described in the Prospectus, will not be, an “investment company” within the meaning of such term under the Investment Company Act.
(s) Securities Act and Exchange Act. The Company will use its commercially reasonable best efforts to comply with all requirements imposed upon it by the Securities Act and the Exchange Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings in, the Placement Shares as contemplated by the provisions hereof and the Prospectus.
(t) No Offer to Sell. Other than the Prospectus and an Issuer Free Writing Prospectus approved in advance by the Company and the Sales Agent in its capacity as principal or agent hereunder, neither the Sales Agent nor the Company (including its agents and representatives, other than the Sales Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.
(u) Sarbanes-Oxley Act. The Company will use its reasonable best efforts to comply with all then effective and applicable provisions of the Sarbanes-Oxley Act.
(v) Transfer Agent. The Company shall maintain, at its sole expense, a registrar and transfer agent for the SV Shares.
8. Conditions to the Sales Agent’s Obligations. The obligations of the Sales Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein (other than those representations and warranties made as of a specified date or time), to the due performance in all material respects by the Company of its obligations hereunder, to the completion by the Sales Agent of a due diligence review satisfactory to the Sales Agent in its reasonable judgment, and to the continuing satisfaction (or waiver by the Sales Agent in its sole discretion) of the following additional conditions:
(a) Registration Statement Effective. The Registration Statement shall be effective and shall be available for the sale of all Placement Shares contemplated to be issued by any Placement Notice, which have not yet been issued and sold pursuant to such Registration Statement.
(b) Securities Act Filings Made. All filings with the Commission required by Rule 424(b) or Rule 433 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424(b) (without reliance on Rule 424(b)(8) under the Securities Act) or Rule 433, as applicable.
(c) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal, provincial or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal, provincial or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the occurrence of any event that makes any material statement made in the Registration Statement or the Prospectus or any material document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, the Prospectus or any documents incorporated by reference or deemed to be incorporated by reference so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, in the case of the Prospectus, so that it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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(d) No Misstatement or Material Omission. The Sales Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Sales Agent’s reasonable opinion is material, or omits to state a fact that in the Sales Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.
(e) Material Changes. Except as contemplated in the Registration Statement and the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change in the authorized capital shares of the Company or any Material Adverse Change or any development that could reasonably be expected to result in a Material Adverse Change, the effect of which, in the reasonable judgment of the Sales Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated by this Agreement and the Prospectus.
(f) Representation Certificate. The Sales Agent shall have received the certificate required to be delivered pursuant to Section 7(m) on or before the date on which delivery of such certificate is required pursuant to Section 7(m).
(g) Legal Opinions. The Sales Agent shall have received the opinion and/or negative assurance of U.S. Counsel as required by Section 7(n) hereof and the opinion of Canadian Counsel required to be delivered pursuant Section 7(n) on or before the date on which such delivery of such opinion and negative assurance is required pursuant to Section 7(n).
(h) Comfort Letter. The Sales Agent shall have received the Comfort Letter required to be delivered pursuant Section 7(o) on or before the date on which such delivery of such Comfort Letter is required pursuant to Section 7(o).
(i) Secretary’s Certificate. On or prior to the date the first Placement Notice is given hereunder, the Sales Agent shall have received a certificate, signed on behalf of the Company by an officer of the Company, certifying as to (i) the articles of association of the Company (as the same may be amended or restated from time to time), (ii) the resolutions of the Board of Directors of the Company (or a committee thereof) authorizing the execution, delivery and performance of this Agreement and the issuance of the Placement Shares and (iii) the incumbency of the officers duly authorized to execute this Agreement and the other documents contemplated by this Agreement.
(j) No Suspension. Trading in the SV Shares shall not have been suspended on the Exchange and the SV Shares shall not have been delisted from the Exchange.
(k) Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(m), the Company shall have furnished to the Sales Agent such appropriate further opinions, certificates, letters and documents as the Sales Agent may reasonably request and which are usually and customarily furnished by an issuer of securities in connection with a securities offering of the type contemplated hereby. All such opinions, certificates, letters and other documents shall have been in compliance with the provisions hereof. The Company will furnish the Sales Agent with such conformed copies of such opinions, certificates, letters and other documents as the Sales Agent shall have reasonably requested.
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(l) Approval for Listing. The Company shall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice.
(m) No Termination Event. There shall not have occurred any event that would permit the Sales Agent to terminate this Agreement pursuant to Section 11(a).
9. Indemnification and Contribution.
(a) Company Indemnification. The Company agrees to indemnify and hold harmless the Sales Agent, the directors, officers, members, partners, employees and agents of the Sales Agent each broker dealer affiliate of the Sales Agent, and each Sales Agent Affiliate, if any, from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable and documented investigative, legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), as and when incurred, to which the Sales Agent, or any such person, may become subject under the Securities Act, the Exchange Act or other federal, provincial or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or any amendment or supplement thereto or in any Issuer Free Writing Prospectus, (y) the omission or alleged omission to state in any such document a material fact required to be stated in it or necessary to make the statements in it not misleading or (z) any breach by any of the indemnifying parties of any of their respective representations, warranties and agreements contained in this Agreement; provided, however, that this indemnity agreement shall not apply to the extent that such loss, claim, liability, expense or damage arises from the sale of the Placement Shares pursuant to this Agreement and is caused directly by an untrue statement or omission made in reliance upon and in strict conformity with written information relating to the Sales Agent and furnished to the Company by the Sales Agent expressly for inclusion in any document as described in clause (x) of this Section 9(a). This indemnity agreement will be in addition to any liability that the Company might otherwise have.
(b) The Sales Agent Indemnification. The Sales Agent agrees to indemnify and hold harmless the Company and its directors and each officer of the Company that signed the Registration Statement, and each person, if any, who (i) controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Company (each, a “Company Affiliate”) from and against any and all losses, claims, liabilities, expenses and damages (including, but not limited to, any and all reasonable and documented investigative, legal and other expenses incurred in connection with, and any and all amounts paid in settlement (in accordance with Section 9(c)) of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), as and when incurred, to which any such Company Affiliate, may become subject under the Securities Act, the Exchange Act or other federal, provincial or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based, directly or indirectly, on (x) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or any amendment or supplement thereto, or (y) the omission or alleged omission to state in any such document a material fact required to be stated in it or necessary to make the statements in it not misleading; provided, however, that this indemnity agreement shall apply only to the extent that such loss, claim, liability, expense or damage is caused directly by an untrue statement or omission made in reliance upon and in strict conformity with written information relating to the Sales Agent and furnished to the Company by the Sales Agent expressly for inclusion in any document as described in clause (x) of this Section 9(b).
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(c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 9 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 9, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 9 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 9 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict of interest exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable and documented out-of-pocket fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable and documented out-of-pocket fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such reasonable and documented out-of-pocket fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 9 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising or that may arise out of such claim, action or proceeding and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of an indemnified party.
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(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 9 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Sales Agent, the Company and the Sales Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company or the Sales Agent from persons other than the Company or the Sales Agent, as applicable, such as persons who control the Company or the Sales Agent, as applicable, within the meaning of the Securities Act, and only with respect to the Company, officers of the Company who signed the Registration Statement and directors of the Company, who also may be liable for contribution) to which the Company and the Sales Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Sales Agent on the other hand. The relative benefits received by the Company on the one hand and the Sales Agent on the other hand shall be deemed to be in the same proportion as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Sales Agent from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Sales Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Sales Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Sales Agent agree that it would not be just and equitable if contributions pursuant to this Section 9(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 9(d) shall be deemed to include, for the purpose of this Section 9(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 9(c) hereof. Notwithstanding the foregoing provisions of this Section 9(d), the Sales Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 9(d), each Company Affiliate and Sales Agent Affiliate will have the same rights to contribution as the Company and Sales Agent, respectively, and each officer of the Company who signed the Registration Statement and each director of the Company will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 9(d), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 9(d) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 9(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 9(c) hereof.
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10. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 9 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive for a period of six (6) years from the date on which this Agreement is terminated pursuant to Section 11, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Sales Agent, any controlling person of the Sales Agent, or the Company (or any of their respective officers, directors, members or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.
11. Termination.
(a) The Sales Agent shall have the right by giving notice as hereinafter specified at any time to terminate this Agreement if (i) any Material Adverse Change, or any development that could reasonably be expected to result in a Material Adverse Change has occurred that, in the reasonable judgment of the Sales Agent, may materially impair the ability of the Sales Agent to sell the Placement Shares hereunder, (ii) the Company shall have failed, refused or been unable to perform any agreement on its part to be performed hereunder; provided, however, in the case of any failure of the Company to deliver (or cause another person to deliver) any certification, opinion, or letter required under Sections 7(m), 7(n), 7(o) or 7(p), the Sales Agent’s right to terminate shall not arise unless such failure to deliver (or cause to be delivered) continues for more than thirty (30) days from the date such delivery was required, (iii) any other condition of the Sales Agent’s obligations hereunder is not fulfilled, or (iv) any suspension or limitation of trading in the Placement Shares or in securities generally on the Exchange shall have occurred (including automatic halt in trading pursuant to market-decline triggers, other than those in which solely program trading is temporarily halted), or a major disruption of securities settlements or clearing services in the United States shall have occurred, or minimum prices for trading have been fixed on the Exchange. Any such termination shall be without liability of any party to any other party except that the provisions of Section 7(g) (Expenses), Section 9 (Indemnification and Contribution), Section 10 (Representations and Agreements to Survive Delivery), Section 11(f), Section 16 (Applicable Law; Consent to Jurisdiction), Section 17 (Appointment of Agent for Service) and Section 18 (Waiver of Jury Trial) hereof shall remain in full force and effect notwithstanding such termination. If the Sales Agent elects to terminate this Agreement as provided in this Section 11(a), the Sales Agent shall provide the required notice as specified in Section 12 (Notices).
(b) The Company shall have the right, by giving notice as hereinafter specified in Section 12, to immediately terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.
(c) The Sales Agent shall have the right, by giving five (5) days’ notice as hereinafter specified in Section 12, to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.
(d) Unless earlier terminated pursuant to this Section 11, this Agreement shall automatically terminate upon the earlier to occur of (i) the issuance and sale of all of the Placement Shares to or through the Sales Agent on the terms and subject to the conditions set forth herein and (ii) the expiration of the Registration Statement on the third anniversary of the initial effective date of the Registration Statement pursuant to Rule 415(a)(5) under the Securities Act; provided that the provisions of Section 7(g), Section 9, Section 10, Section 11(f), Section 16, Section 17 and Section 18 hereof shall remain in full force and effect notwithstanding such termination.
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(e) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 11(a), (b), (c) or (d) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 7(g), Section 9, Section 10, Section 11(f), Section 16, Section 17 and Section 18 shall remain in full force and effect.
(f) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Sales Agent or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such termination shall not become effective until the close of business on such Settlement Date and such Placement Shares shall settle in accordance with the provisions of this Agreement.
12. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to the Sales Agent, shall be delivered to:
A.G.P./Alliance Global Partners
590 Madison Avenue, 28th Floor
New York, New York 10022
Attention: Thomas Higgins
Email: [****]
with a copy (which shall not constitute notice) to:
Sullivan & Worcester LLP
1251 Avenue of the Americas
New York, New York 10020
Attention: Ron Ben-Bassat, Esq. or Eric Victorson, Esq.
Email: [****] or [****]
and if to the Company, shall be delivered to:
Digi Power X Inc.
218 NW 4th Street, 2nd Floor
Miami, FL 33127
Attention: Michel Amar, Chief Executive Officer
Email: [****]
with a copy (which shall not constitute notice) to:
Katten Muchin Rosenman LLP
525 W. Monroe Street
Chicago, IL 60661
Attention: Alyse Sagalchik
Email: [****]
Each party to this Agreement may change such address for notices by sending to the other party to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by email on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York and Canada are open for business.
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An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Section 12 if sent to the electronic mail address specified in Schedule 2 hereof. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives confirmation of receipt by the person to whom the notice was intended (other than pursuant to auto-reply). Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.
13. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Sales Agent and their respective successors and permitted assigns and, as to Sections 5(b) and 9, the other indemnified parties specified therein. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of each such party. Nothing in this Agreement, express or implied, is intended to confer upon any other person any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that the Sales Agent may assign its rights and obligations hereunder to an affiliate of the Sales Agent without obtaining the Company’s consent, so long as such affiliate is a registered broker-dealer.
14. Adjustments for Share Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any share split, share dividend or similar event effected with respect to the SV Shares.
15. Entire Agreement; Amendment; Severability. This Agreement (including all schedules (as amended pursuant to this Agreement) and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof (including the Prior Agreement). Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Sales Agent provided, however, that Schedule 2 of this Agreement may be amended by either party from time to time by sending a notice containing a revised Schedule 2 to the other party in the manner provided in Section 12 and, upon such amendment, all references herein to Schedule 2 shall automatically be deemed to refer to such amended Schedule 2. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement.
16. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to the principles of conflicts of laws to the extent the same would result in the application of the laws of another jurisdiction. Each party hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection with any transaction contemplated hereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof (certified or registered mail, return receipt requested) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient notice of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
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17. Appointment of Agent for Service. The Company has appointed Cogency Global Inc., located at 122 E. 42nd Street, 18th Floor, New York, NY 10168 as its agent for service of process in any suit, action or proceeding described in Section 16 and agrees that service of process in any suit, action or proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to, and hereby submits to the personal jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan. The Company represents and warrants that such agent has agreed to act as the Company’s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.
18. Waiver of Jury Trial. The Company and the Sales Agent each hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.
19. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the Sales Agent is acting solely as agent in connection with the sale of the Placement Shares contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, shareholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Sales Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Sales Agent has advised or is advising the Company on other matters, and the Sales Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement, except the obligations expressly set forth in this Agreement;
(b) the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) the Sales Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement, and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(d) the Company has been advised and is aware that the Sales Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Sales Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and
(e) the Company waives, to the fullest extent permitted by law, any claims it may have against the Sales Agent, for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the transactions contemplated by this Agreement and agrees that the Sales Agent shall have no liability (whether direct or indirect, in contract, tort or otherwise) to the Company in respect of such a fiduciary claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including shareholders, partners, employees or creditors of the Company.
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20. Use of Information. The Sales Agent may not provide any information gained in connection with this Agreement and the transactions contemplated by this Agreement, including due diligence, to any third party other than its legal counsel advising it on this Agreement unless expressly approved by the Company in writing.
21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or electronic transmission. Counterparts may be delivered via facsimile, electronic mail (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
22. Effect of Headings; Knowledge of the Company. The section and Exhibit headings herein are for convenience only and shall not affect the construction hereof. All references in this Agreement to the “knowledge of the Company” or the “Company’s knowledge” or similar qualifiers shall mean the actual knowledge of the directors and officers of the Company, after due inquiry.
23. Judgment Currency. (a) Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.
(b) If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 24 referred to as the “Judgment Currency”) an amount due in U.S. Dollars under this Agreement, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding: (A) the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect to such conversion being made on such date or (B) the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion is made pursuant to this Section 23 being hereinafter referred to as the “Judgment Conversion Date”).
(c) If in the case of any proceeding in the court of any jurisdiction referred to in Section 23(b) above, there is a change in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date of payment, will produce the amount of U.S. Dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(d) Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Agreement.
24. Definitions. As used in this Agreement, the following term has the meaning set forth below:
(a) “Applicable Time” means the date of this Agreement, each Representation Date, each date on which a Placement Notice is given, each Point of Sale, and each Settlement Date.
[Remainder of Page Intentionally Blank]
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If the foregoing correctly sets forth the understanding between the Company and the Sales Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Sales Agent.
| Very truly yours, | |||
| Digi Power X Inc. | |||
| By: | /s/ Michel Amar | ||
| Name: | Michel Amar | ||
| Title: | Chief Executive Officer | ||
| ACCEPTED as of the date first-above written: | |||
| A.G.P./ALLIANCE GLOBAL PARTNERS | |||
| By: | /s/ Thomas Higgins | ||
| Name: | Thomas Higgins | ||
| Title: | Managing Director | ||
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SCHEDULE 1
Form of Placement Notice
| From: | Digi Power X Inc. |
| To: | A.G.P./Alliance Global Partners |
| Attention: [●] | |
| Subject: | Placement Notice |
| Date: | [●], 202[●] |
Ladies and Gentlemen:
Pursuant to the terms and subject to the conditions contained in the Sales Agreement (the “Sales Agreement”) between Digi Power X Inc., a Canadian company incorporated under the British Columbia Business Corporations Act (the “Company”), and A.G.P./Alliance Global Partners (the “Sales Agent”), dated [●], 2026, the Company hereby requests that the Sales Agent sell up to [●] Subordinate Voting Shares, without par value (the “Placement Shares”), at a minimum market price of $[●] per share, during the time period beginning [month, day, time] and ending [month, day, time] [and with no more than [●] Placement Shares sold in any one Trading Day].
[The Company may include such other sale parameters as it deems appropriate.]
Capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Sales Agreement.
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SCHEDULE 2
Notice Parties
THE COMPANY
Michel Amar, Chief Executive Officer
Paul Ciullo, Chief Financial Officer
THE SALES AGENT
[****]
With copies to:
[****]
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SCHEDULE 3
Compensation
The Company shall pay to the Sales Agent in cash, upon each sale of Placement Shares through the Sales Agent pursuant to this Agreement, an amount equal to 3.0% of the aggregate gross proceeds from each sale of Placement Shares.*
| * | The foregoing rate of compensation shall not apply when the Sales Agent purchases Placement Shares on a principal basis, in which case the Company may sell the Placement Shares to the Sales Agent as principal at a price to be mutually agreed upon by the Company and the Sales Agent at the relevant Point of Sale pursuant to the applicable Placement Notice (it being hereby acknowledged and agreed that the Sales Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to the Sales Agreement, except as otherwise agreed by the Sales Agent and the Company in writing and expressly set forth in a Placement Notice). |
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Exhibit 7(m)
OFFICER CERTIFICATE
The undersigned, the duly qualified and appointed ___of Digi Power X Inc., a Canadian company incorporated under the British Columbia Business Corporations Act (the “Company”), does hereby certify in such capacity and on behalf of the Company, pursuant to Section 7(m) of the Amended and Restated Sales Agreement, dated April 9, 2026 (the “Sales Agreement”), between the Company and A.G.P./Alliance Global Partners, that:
| (i) | the representations and warranties of the Company in Section 6 of the Sales Agreement (A) to the extent such representations and warranties are subject to qualifications and exceptions contained therein relating to materiality or Material Adverse Change, are true and correct on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof, except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such date, and (B) to the extent such representations and warranties are not subject to any qualifications or exceptions, are true and correct in all material respects as of the date hereof as if made on and as of the date hereof with the same force and effect as if expressly made on and as of the date hereof except for those representations and warranties that speak solely as of a specific date and which were true and correct as of such date; |
| (ii) | the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied pursuant to the Sales Agreement at or prior to the date hereof; |
| (iii) | as of the date hereof, (A) the Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, (B) the Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (C) no event has occurred as a result of which it is necessary to amend or supplement the Registration Statement or the Prospectus in order to make the statements therein not untrue or misleading for clauses (A) and (B) above, respectively, to be true and correct; |
| (iv) | there has been no Material Adverse Change since the date as of which information is given in the Prospectus, as amended or supplemented; |
| (v) | as of the date hereof, the Company does not possess any material non-public information; and |
| (vi) | the aggregate offering price of the Placement Shares that may be issued and sold pursuant to the Sales Agreement and the maximum number or amount of Placement Shares that may be sold pursuant to the Sales Agreement have been duly authorized by the Company’s board of directors or a duly authorized committee thereof. |
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Terms used herein and not defined herein have the meanings ascribed to them in the Sales Agreement.
| Dated: | ||||
| By: | ||||
| Name | ||||
| Title: |
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Exhibit 4.2
SUBORDINATE VOTING SHARE PURCHASE WARRANT
Digi Power X Inc.
| Warrant Shares: 269,231 | Initial Issue Date: February 20, 2026 |
| Initial Exercise Date: February 20, 2026 |
THIS SUBORDINATE VOTING SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, H.C. WAINWRIGHT & CO., LLC or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Initial Exercise Date set forth above and on or prior to 5:00 p.m. (New York City time) on February 20, 2031 (the “Termination Date”), but not thereafter, to subscribe for and purchase from DIGI POWER X INC., a corporation incorporated under the Business Corporations Act (British Columbia) (the “Company”), up to 269,231 Subordinate Voting Shares (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Subordinate Voting Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors” means the board of directors of the Company, as constituted from time to time.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in the City of New York and the City of Toronto are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in the City of New York and the City of Toronto are generally are open for use by customers on such day.
“Commission” means the United States Securities and Exchange Commission.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Subordinate Voting Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Subordinate Voting Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Subordinate Voting Shares.
“Subordinate Voting Shares” means the Subordinate Voting Shares of the Company and any other class of securities into which such securities may hereafter be reclassified or changed.
“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed between the date hereof and the Closing Date.
“Trading Day” means a day on which the principal Trading Market is open for trading; provided, however, that if the Company has no Trading Market, shall mean a Business Day.
“Trading Market” means any of the following markets or exchanges on which the Subordinate Voting Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQB or the OTCQX (or any successors to any of the foregoing).
“Transfer Agent” means Marrelli Trust Company Limited, the current transfer agent of the Company, and any successor transfer agent of the Company.
“VWAP” means, for any period in question, the volume weighted average price of the Subordinate Voting Shares over such period (or the nearest preceding date) on the Trading Market.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Subordinate Voting Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and this Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
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b) Exercise Price. The exercise price per Subordinate Voting Share under this Warrant shall be US$2.85, subject to adjustment as described hereunder (the “Exercise Price”).
c) Cashless Exercise. If at any time after the Effectiveness Deadline there is no effective registration statement pursuant to the Securities Act registering, or the prospectus contained therein is not available for, the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) = | as applicable: (i) the VWAP over the five (5) consecutive Trading Days immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of, or during, regular trading hours on such Trading Day, or (ii) the VWAP over the five (5) Trading Days ending on and inclusive of the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is delivered pursuant to Section 2(a) hereof after the close of regular trading hours on such Trading Day; | |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and | |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act for purposes of Rule 144 under the Securities Act the holding period of the Warrant Shares being issued may be tacked on to the exercising Holder’s holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).
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d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by electronic book-entry, at the election of the Holder by crediting the account of the Holder’s or its designee’s prime broker with The Depository Trust Company through its Deposit/Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and, at the applicable time, either (A) there is an effective and available registration statement under the Securities Act covering the resale of such Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise in accordance with the terms hereof and such Warrant Shares may be resold by the Holder pursuant to Rule 144 without limitation or any current public information requirement, as certified by the Holder in a customary non-affiliate representation letter delivered thereby to the Company and the Transfer Agent, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is the later of (i) the earlier of one (1) Trading Day after (x) the delivery to the Company of the Notice of Exercise and (y) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise and (ii) payment of the aggregate Exercise Price to the Company as set forth above (other than in the case of cashless exercise, if permitted) (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided, that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by the Warrant Share Delivery Date. If the Company fails to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each US$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Subordinate Voting Shares on the date of the applicable Notice of Exercise), US$5 per Trading Day (increasing to US$10 per Trading Day on the fifth (5th) Trading Day after the Warrant Share Delivery Date) for each Trading Day after the third Trading Day following such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Trading Market as in effect on the date of delivery of the Notice of Exercise.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
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iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Subordinate Voting Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Subordinate Voting Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of this Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Subordinate Voting Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder provided that the Holder shall have no right to any such amount hereunder to the extent the failure of the Company to deliver such Warrant Shares is caused by the Holder’s failure to provide complete information required to be provided by the Holder to the Company hereunder or the inaccuracy of any such information. For example, if the Holder purchases Subordinate Voting Shares having a total purchase price of US$11,000 to cover a Buy-In with respect to an attempted exercise of Subordinate Voting Shares with an aggregate sale price giving rise to such purchase obligation of US$10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder US$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Subordinate Voting Shares upon exercise of this Warrant as required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust & Clearing Corporation (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Subordinate Voting Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Subordinate Voting Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Subordinate Voting Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Subordinate Voting Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act (as if applicable hereto) and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation (other than to the extent that information on the number of outstanding Subordinate Voting Shares is provided by the Company and relied upon by the Holder). In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation (other than to the extent that information on the number of outstanding Subordinate Voting Shares is provided by the Company and relied upon by the Holder). For purposes of this Section 2(e), in determining the number of outstanding Subordinate Voting Shares, a Holder may rely on the number of outstanding Subordinate Voting Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Subordinate Voting Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Subordinate Voting Shares then outstanding. In any case, the number of outstanding Subordinate Voting Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Subordinate Voting Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Subordinate Voting Shares outstanding immediately after giving effect to the issuance of Subordinate Voting Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Subordinate Voting Shares outstanding immediately after giving effect to the issuance of Subordinate Voting Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
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f) Redemption of Warrants for Cash. If, at any time during the period beginning on the Initial Issue Date and ending at 5:00 p.m. (New York City time) on the Termination Date, there is no period of five (5) consecutive Trading Days during which the VWAP of the Company’s Subordinate Voting Shares exceeds US$4.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and similar events), then, to the extent this Warrant remains outstanding as of the Termination Date, the Company shall, within five (5) Business Days following the Termination Date, redeem this Warrant by paying to the Holder, via wire transfer of immediately available funds, an aggregate amount of US$0.5572 per Warrant Share available to be issued hereunder immediately prior to the termination of this Warrant in accordance with its terms.
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its Subordinate Voting Shares or any other equity or equity equivalent securities payable in Subordinate Voting Shares (which, for avoidance of doubt, shall not include any Subordinate Voting Shares issued by the Company upon exercise of this Warrant or any other Warrants), (ii) subdivides outstanding Subordinate Voting Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Subordinate Voting Shares into a smaller number of shares, or (iv) issues by reclassification of the outstanding Subordinate Voting Shares any capital shares of the Company, then, in each case, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Subordinate Voting Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Subordinate Voting Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution (provided, that such adjustment shall be reversed if such dividend or distribution is terminated prior to the making thereof) and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of more than 50% of the outstanding Subordinate Voting Shares sell, tender or exchange their shares for other securities, cash or property, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Subordinate Voting Shares or any compulsory share exchange pursuant to which the Subordinate Voting Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Subordinate Voting Shares (not including any Subordinate Voting Shares held by the other Person or other Persons making or party to, or associated or affiliated with, the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of Subordinate Voting Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and/or any additional or other consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of one outstanding Subordinate Voting Share. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Subordinate Voting Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Subordinate Voting Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
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c) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Subordinate Voting Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Subordinate Voting Shares (excluding treasury shares, if any) issued and outstanding.
d) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Subordinate Voting Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Subordinate Voting Shares, (C) the Company shall authorize the granting to all holders of the Subordinate Voting Shares rights or warrants to subscribe for or purchase any capital shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Subordinate Voting Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Subordinate Voting Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least five (5) Business Days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Subordinate Voting Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Subordinate Voting Shares of record shall be entitled to exchange their Subordinate Voting Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice on SEDAR. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
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Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Exercise Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
d) Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and, if required, under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provides to the Company an opinion of counsel, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that the transfer of this Warrant does not require registration under the Securities Act.
e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act, and further represents and warrants that it is, and upon any exercise of this Warrant will be, an Institutional Accredited Investor, as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
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f) Registration Obligations. As soon as reasonably practicable (and in any event within thirty (30) calendar days of the Initial Issue Date) (the “Filing Deadline”), the Company shall file a registration statement on Form F-3 (or other appropriate form if the Company is not then F-3 eligible) providing for the resale of the Warrants Shares by the Holder of this Warrant (the “Resale Registration Statement”). The Company shall use commercially reasonable efforts to cause the Resale Registration Statement to become effective within (x) thirty (30) calendar days following the Filing Deadline if the Resale Registration Statement is not subject to a full review by the SEC or (y) seventy-five (75) calendar days following the Filing Deadline in case of “full review” of such registration statement by the Commission (the “Effectiveness Deadline”); provided, however, that in the event the Company is notified by the Commission that the Resale Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, and to keep the Resale Registration Statement effective at all times until the earlier of such time that this Warrant (a) is exercised in full and (b) expires in accordance with its terms. In the event that the Resale Registration Statement is not (i) filed by the Filing Deadline (a “Registration Failure”) or (ii) declared effective by the Commission by the Effectiveness Deadline (an “Effectiveness Failure” and, collectively with a Registration Failure, “Failures” and each, a “Failure”), then, in addition to any other rights the Holder may have hereunder or under applicable law, on the Filing Deadline or the Effectiveness Deadline (each such date being referred to herein as an “Event Date”) and on each monthly anniversary of such Event Date (if the Resale Registration Statement shall not have been filed or declared effective, respectively, by the applicable Event Date) until the applicable Failure is cured, the Company shall pay the Holder of this Warrant an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.5% multiplied by the aggregate Exercise Price of this Warrant; provided however, in the event that there shall be more than one Failure occurring simultaneously, the 1.5% shall apply in the aggregate (e.g., during any single or multiple Failure(s), 1.5% shall be due in the aggregate for all Failure(s)). If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder of this Warrants, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the Resale Registration Statement being filed or declared effective, as the case may be.
Section 5. Miscellaneous.
a) No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it or to the Transfer Agent, as applicable (which, in the case of this Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company and the Transfer Agent, if applicable, will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
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d) Authorized Shares.
The Company covenants that, during the period this Warrant is outstanding, it will reserve from its authorized and unissued Subordinate Voting Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be reasonably necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be reasonably necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
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f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by U.S. state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses, including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 218 NW 24th Street, 2nd Floor, Miami, Florida, 33127, Attention: Chief Financial Officer, e-mail address: paul@digipowerx.com, or such other e-mail address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Subordinate Voting Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
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k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of both the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
o) Currency. All references to currency herein shall be deemed to refer to United States dollars.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| DIGI POWER X INC. | |||
| By: | /s/ Michel Amar | ||
| Name: | Michel Amar | ||
| Title: | Chief Executive Officer | ||
14
NOTICE OF EXERCISE
To: DIGI POWER X INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States (unless otherwise agreed to by the Company and the Holder); or
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: _______________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: _______________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to exercise the Warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ||
| (Please Print) | ||
| Address: | ||
| (Please Print) | ||
| Phone Number: | ||
| Email Address: | ||
| Dated: _______________ __, ______ | ||
| Holder’s Signature: _________________________ | ||
| Holder’s Address: __________________________ |
Exhibit 4.5
DIGI POWER X INC.
AND
[●]
Trustee
TRUST INDENTURE
made as of [●], 20[●]
[●] Debentures
TABLE OF CONTENTS
| ARTICLE 1 - INTERPRETATION | 1 | ||
| 1.01 | Definitions | 1 | |
| 1.02 | Meaning of “Outstanding” for Certain Purposes | 11 | |
| 1.03 | Headings | 12 | |
| 1.04 | Extended Meanings | 12 | |
| 1.05 | Applicable Law | 12 | |
| 1.06 | Language | 12 | |
| 1.07 | Accounting Principles | 13 | |
| 1.08 | Interest Calculations and Payment | 13 | |
| 1.09 | Interest Act (Canada) | 13 | |
| 1.10 | Statutory References | 13 | |
| 1.11 | Day Not a Business Day | 13 | |
| 1.12 | Currency | 14 | |
| 1.13 | Shareholders, Directors and Officers Exempt from Individual Liability | 14 | |
| 1.14 | Schedules | 14 | |
| ARTICLE 2 - THE DEBENTURES | 14 | ||
| 2.01 | Amount Unlimited; Issuable in Series | 14 | |
| 2.02 | Designation, Terms and Form of Series A Debentures | 14 | |
| 2.03 | Issue of Series A Debentures | 15 | |
| 2.04 | Debentures to Rank Pari Passu | 15 | |
| 2.05 | Signing of Debentures | 15 | |
| 2.06 | Certification by Trustee | 16 | |
| 2.07 | Replacement of Debentures | 16 | |
| 2.08 | Computation of Interest | 16 | |
| 2.09 | Payment | 17 | |
| 2.10 | Payment Agreements for Debentures | 17 | |
| 2.11 | Creation and Issue of Additional Debentures | 18 | |
| 2.12 | Interim Debentures | 18 | |
| 2.13 | Global Debentures | 19 | |
| ARTICLE 3 - REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP | 20 | ||
| 3.01 | Fully Registered Debentures | 20 | |
| 3.02 | Coupon Debentures | 20 | |
| 3.03 | Exchange of Debentures | 21 | |
| 3.04 | Charges for Transfer and Exchange | 21 | |
| 3.05 | Inspection of Registers and Lists of Holders | 22 | |
| 3.06 | Closing of Registers | 22 | |
| 3.07 | Ownership of Debentures | 23 | |
i
| ARTICLE 4 - SECURITY | 24 | ||
| 4.01 | Fixed and Floating Charge | 24 | |
| 4.02 | Pledged Securities | 25 | |
| 4.03 | Reservation of Last Day of Leasehold Terms | 26 | |
| 4.04 | Dealing with Collateral by the Corporation | 26 | |
| 4.05 | Effective Date of Security | 27 | |
| 4.06 | Defeasance | 27 | |
| 4.07 | After Acquired Property and Further Assurances | 27 | |
| 4.08 | Registration | 28 | |
| 4.09 | Attachment | 28 | |
| 4.10 | Expropriation | 28 | |
| 4.11 | Funds Held by Trustee | 29 | |
| 4.12 | Power of Attorney for Québec Registrations | 29 | |
| 4.13 | Sub-attorney for Québec Discharges | 29 | |
| ARTICLE 5 - REDEMPTION AND PURCHASE | 29 | ||
| 5.01 | Optional Redemption of Series A Debentures | 29 | |
| 5.02 | Places of Payment | 30 | |
| 5.03 | Partial Redemption | 30 | |
| 5.04 | Notice of Redemption | 30 | |
| 5.05 | Payment of Redemption Price | 31 | |
| 5.06 | Purchase of Debentures | 31 | |
| 5.07 | Cancellation of Retired Debentures | 31 | |
| 5.08 | Application to Subsequent Series | 31 | |
| ARTICLE 6 - SINKING FUND PAYMENTS FOR SERIES A DEBENTURES | 31 | ||
| 6.01 | Mandatory Sinking Fund Payments for Series A Debentures | 31 | |
| 6.02 | Credit for Non-Sinking Fund Redemptions | 32 | |
| 6.03 | Sinking Fund Redemption Price | 32 | |
| ARTICLE 7 - COVENANTS OF THE CORPORATION | 32 | ||
| 7.01 | Positive Covenants | 32 | |
| 7.02 | Reporting Requirements | 35 | |
| 7.03 | Negative Covenants | 36 | |
| 7.04 | Financial Covenants | 36 | |
| 7.05 | Trustee’s Remuneration and Expenses | 37 | |
| 7.06 | Not to Accumulate Interest | 37 | |
| 7.07 | Payment of Additional Amounts | 38 | |
| 7.08 | Principal, Interest, Etc. to Include Additional Amounts | 38 | |
| 7.09 | Performance of Covenants by Trustee | 38 | |
| ARTICLE 8 - DEFAULT AND ENFORCEMENT | 38 | ||
| 8.01 | Events of Default | 38 | |
| 8.02 | Acceleration on Default | 40 | |
| 8.03 | Waiver of Default | 40 | |
| 8.04 | Remedies in Case of Default | 41 | |
| 8.05 | Suits by Debentureholders | 45 | |
| 8.06 | Application of Money Received by Trustee | 45 | |
| 8.07 | Distribution of Proceeds | 46 | |
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| ARTICLE 9 - SATISFACTION AND DISCHARGE | 46 | ||
| 9.01 | Cancellation and Destruction | 46 | |
| 9.02 | Non-Presentment of Debentures or Coupons | 47 | |
| 9.03 | Repayment of Unclaimed Money to Corporation | 47 | |
| 9.04 | Release from Covenants and Discharge | 47 | |
| ARTICLE 10 - SUCCESSOR CORPORATIONS | 48 | ||
| 10.01 | Certain Requirements in Respect of Merger, etc. | 48 | |
| 10.02 | Vesting of Powers in Successor | 48 | |
| ARTICLE 11 - MEETINGS OF DEBENTUREHOLDERS | 48 | ||
| 11.01 | Right to Convene Meeting | 48 | |
| 11.02 | Notice | 49 | |
| 11.03 | Chair | 49 | |
| 11.04 | Quorum | 49 | |
| 11.05 | Power to Adjourn | 49 | |
| 11.06 | Show of Hands | 50 | |
| 11.07 | Poll | 50 | |
| 11.08 | Voting | 50 | |
| 11.09 | Regulations | 50 | |
| 11.10 | Corporation and Trustee may be Represented | 51 | |
| 11.11 | Powers Exercisable by Extraordinary Resolution | 51 | |
| 11.12 | Meaning of “Extraordinary Resolution” | 53 | |
| 11.13 | Powers Cumulative | 53 | |
| 11.14 | Minutes | 54 | |
| 11.15 | Instruments in Writing | 54 | |
| 11.16 | Binding Effect of Resolutions | 54 | |
| 11.17 | Series Approval | 54 | |
| ARTICLE 12 - SUPPLEMENTAL INDENTURES | 55 | ||
| 12.01 | Execution of Supplemental Indentures | 55 | |
iii
| ARTICLE 13 - ADMINISTRATION OF THE TRUST | 56 | ||
| 13.01 | Sufficiency of Execution of Instruments | 56 | |
| 13.02 | Trustee May Require Indemnity | 56 | |
| 13.03 | Trustee May Employ Assistants | 57 | |
| 13.04 | Trustee May Act on Opinions or Advice | 57 | |
| 13.05 | Trustee May Rely upon Declarations | 57 | |
| 13.06 | Corporation Must Furnish Evidence of Compliance | 57 | |
| 13.07 | Trustee May Accept a Certificate of the Corporation | 58 | |
| 13.08 | Trustee May Act on Instruments Believed to be Genuine | 58 | |
| 13.09 | Counsel Fees Need Not be Assessed | 58 | |
| 13.10 | No Person Dealing with Trustee Need Enquire | 58 | |
| 13.11 | Investment of Trust Funds | 58 | |
| ARTICLE 14 - CONCERNING THE TRUSTEE | 59 | ||
| 14.01 | Duty of Care of Trustee | 59 | |
| 14.02 | Resignation, etc. of Trustee and Appointment of New Trustee | 59 | |
| 14.03 | Trustee May Deal in Debentures | 59 | |
| 14.04 | Trustee Not Required to Give Security | 59 | |
| 14.05 | Protection of Trustee | 59 | |
| 14.06 | Indemnification of Trustee | 60 | |
| 14.07 | Conflict of Interest | 60 | |
| 14.08 | Acceptance of Trusts | 60 | |
| ARTICLE 15 - NOTICES | 61 | ||
| 15.01 | Notice to Corporation | 61 | |
| 15.02 | Notice to Debentureholders | 61 | |
| 15.03 | Notice to Trustee | 61 | |
| 15.04 | Waiver | 61 | |
| ARTICLE 16 - EXECUTION | 62 | ||
| 16.01 | Counterparts and Formal Date | 62 | |
iv
THIS TRUST INDENTURE is made as of [●], 20[●]
BETWEEN
DIGI POWER X INC., a corporation incorporated under the Business Corporations Act (British Columbia) (the “Corporation”),
- and -
[●], a trust company incorporated under the laws of [●] (the “Trustee”).
WHEREAS the Corporation wishes to provide for the issuance from time to time of the Debentures in one or more series and, under the laws relating thereto, has the power and authority to create and issue the Debentures;
AND WHEREAS the Corporation has done and performed things necessary to make the Debentures, when issued and certified by the Trustee as in this Indenture provided, legally binding obligations of the Corporation with the benefits and subject to the terms of this Indenture;
AND WHEREAS the foregoing recitals are made by the Corporation;
NOW THEREFORE, in consideration of the premises, the covenants and agreements herein contained, the sum of $1.00 and other good and valuable consideration now paid by the Trustee to the Corporation (the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.01 Definitions
In this Indenture, unless something in the subject matter or context is inconsistent therewith:
“Acquisition” means, with respect to any Person, any purchase or other acquisition, regardless of how accomplished or effected (including any purchase or other acquisition effected by way of amalgamation, merger, arrangement, business combination or other form of corporate reorganization or by way of purchase, lease or other acquisition arrangements) of (a) any other Person (including any purchase or acquisition of such number of the issued and outstanding securities of, or such portion of an equity interest in, such other Person that such other Person becomes a Subsidiary of the purchaser or of any of its Affiliates) or of all or substantially all of the assets of any other Person or (b) any division, business, operation or undertaking of any other Person or of all or substantially all of the assets of any division, business, operation or undertaking of any other Person.
“Additional Amounts” has the meaning set out in Section 7.07.
“Additional Debentures” mean Debentures issued hereunder, other than Series A Debentures.
“Affiliate” has the meaning attributed thereto in the Business Corporations Act (British Columbia).
“Applicable Law” means
(i) any applicable domestic or foreign law including any statute, subordinate legislation or treaty, and
(ii) any applicable guideline, directive, rule, standard, requirement, policy, order, judgment, injunction, award or decree of a Governmental Authority having the force of law.
“Authorized Investments” means:
(i) negotiable instruments or securities in bearer or registered form with a term to maturity of not more than 45 days which evidence:
(A) obligations of or guaranteed by the Government of Canada as to both credit and timeliness;
(B) obligations of or guaranteed by a province or municipality of Canada so long as they have the Required Rating;
(C) deposits, bankers’ acceptances or subordinated debentures issued or accepted by any Canadian bank so long as they have the Required Rating; or
(D) commercial paper, secured bonds or senior unsecured obligations of Canadian corporations or other Canadian issuers so long as they have the Required Rating; or
(ii) demand deposits in any Canadian bank so long as they have the Required Rating,
provided that, the aggregate balance of all investments in securities of any one issuer, other than securities referred to in clause (i)(A) above, will be limited to 10% of the face amount of all Authorized Investments.
“Book Based System” has the meaning set out in Section 2.13(a).
“Business Day” means a day on which banks are generally open for business in Toronto, Ontario, but does not include Saturday or Sunday.
“CDS” means The Canadian Depositary for Securities Ltd. and its successors.
“Canada Yield Price” means, with respect to any Debenture, an amount calculated to provide a yield to maturity of such Debenture equal to the Government of Canada Yield plus [●]%, such calculation to be made on the Business Day preceding the giving of notice of redemption pursuant to Section 5.04.
2
“Capital Expenditure” means any expenditure made by any Person for the purchase or acquisition, repair or replacement of capital assets, net of proceeds of disposition of capital assets (other than proceeds received on a sale-leaseback transaction), and any expenditure related to a Capitalized Lease Obligation; but excluding the amount expended on repair or replacement of assets to the extent of insurance proceeds or third party funding received by such Person on account of damage or destruction, all as determined in accordance with GAAP.
“Capital Lease” means a capital lease or a lease that should be treated as a capital lease in accordance with GAAP.
“Capitalized Lease Obligation” means a lease obligation of any Person which is in respect of a Capital Lease.
“Certificate of the Corporation”, “Order of the Corporation” or “Request of the Corporation” mean, respectively, a written certificate, order or request signed in the name of the Corporation by any two of its Chief Executive Officer, Chief Financial Officer or [●] and may consist of one or more instruments so executed.
“Certificated Security” means a Security that is represented by a certificate.
“Certified Resolution” means a copy of a resolution certified by an officer of the Corporation to have been duly passed by the Directors and to be in full force and effect on the date of such certification.
“Clearing Agency” means CDS.
“Collateral” has the meaning set out in Section 4.01.
“Compliance Certificate” means a certificate of the Corporation signed by the Chief Financial Officer of the Corporation substantially in the form set forth in Schedule 7.02(c).
“Contingent Obligation” means, as to any Person, any obligation, whether secured or unsecured, of such Person guaranteeing or indemnifying, or in effect guaranteeing or indemnifying, for any indebtedness, leases, dividends, letters of credit or other monetary obligations (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person as an account party in respect of a letter of credit or letter of guarantee issued to assure payment by the primary obligor of any such primary obligation and any obligations of such Person, whether or not contingent, (i) to purchase any such primary obligation or any assets constituting direct or indirect security therefor, (ii) to advance or supply funds for the purchase or payment of any such primary obligation or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase assets, securities or services primarily for the purpose of assuring the obligee under any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the obligee under such primary obligation, against loss in respect of such primary obligation; but excluding endorsements of instruments for deposit or collection in the ordinary course of business.
“Corporation” has the meaning set out in the description of the parties above.
3
“Corporation’s Auditors” means [●], the independent firm of chartered accountants duly appointed as auditors of the Corporation.
“Counsel” means a law firm retained by the Trustee or retained by the Corporation and acceptable to the Trustee.
“Current Assets” and “Current Liabilities” of the Corporation mean the assets and liabilities of the Corporation on a consolidated basis which, at the date of determination, in accordance with GAAP, would be classified as current on a balance sheet.
“Current Assets to Current Liabilities Ratio” means the ratio of the Corporation’s Current Assets to the Corporation’s Current Liabilities.
“DBRS” means DBRS Limited and its successors.
“Debentureholders” or “holders” means the Persons whose names are for the time being entered in the registers hereinafter mentioned as holders of Debentures.
“Debentures” means the debentures of the Corporation issued and certified hereunder and for the time being outstanding.
“Debentureholders’ Request” means an instrument signed in one or more counterparts by the holders of not less than 25% in principal amount of the Debentures (or, in respect of a request relating solely to a particular series of Debentures, the Debentures of such series) requesting the Trustee to take the action or proceeding specified therein.
“Debt” means, with respect to any Person, without duplication:
(i) all items which would then be classified as a liability on a consolidated balance sheet of the Person or the notes thereto; and
(ii) to the extent not otherwise included as Debt pursuant to the provisions of paragraph (i) of this definition, without duplication, any item that is:
(A) an obligation of any Person in respect of the borrowed money or for the deferred purchase price of assets or services or an obligation of any Person that is evidenced by a note, bond, debenture or any other similar instrument;
(B) a transfer with recourse or with an obligation to repurchase, to the extent of the liability of any Person with respect thereto;
(C) an obligation secured by any Lien on any assets of any Person to the extent attributable to its interest in such assets, even though such Person has not assumed or become liable for the payment thereof;
(D) a Capitalized Lease Obligation of any Person;
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(E) an obligation of any Person arising in connection with an acceptance facility or letter of credit or letter of guarantee issued by or for the account of any Person;
(F) a Contingent Obligation of any Person to the extent that the primary obligation so guaranteed is not otherwise classified as a liability on the consolidated balance sheet of the Person; or
(G) the aggregate amount at which any securities in the capital of any Person that are redeemable or retractable at the option of the holder of such securities (except where the holder is such Person) may be redeemed or retracted;
provided, however, that there will not be included for the purpose of this definition any item that is on account of (I) subject to clause (F) above, issued share capital or surplus, (II) reserves for deferred income taxes or general contingencies, (III) minority interests in Subsidiaries or (IV) trade account payables and accrued liabilities (including income taxes payable) incurred in the ordinary course of business.
“Debt to Tangible Net Worth Ratio” means the ratio of the Corporation’s Debt to the Corporation’s Tangible Net Worth.
“Depositary” means, with respect to Debentures of any series issuable in whole or in part in the form of one or more Global Debentures, CDS or any other Clearing Agency that is designated to act as depositary for such Debentures.
“Depreciation Expense” means, for any period with respect to any Person, depreciation, amortization, depletion and other like reductions to income of such Person for such period not involving any outlay of cash, determined on a consolidated basis in accordance with GAAP.
“Designated Subsidiary” means, at any time, any Subsidiary of the Corporation which has then been designated as a Designated Subsidiary by notice in writing by the Corporation to the Trustee or any other Subsidiary of the Corporation whose Current Assets are equal to or exceed 10% of the Current Assets of the Corporation determined on a consolidated basis as at the date at which the then latest audited annual or unaudited quarterly consolidated financial statements of the Corporation were prepared.
“Director” means a director of the Corporation and reference without more to action by the Directors means action by the directors of the Corporation as a board or, whenever duly empowered, action by an executive committee of the board.
“Disposition” means any sale, assignment, transfer, conveyance, lease, licence or other disposition of any nature or kind whatsoever of any assets or of any right, title or interest in or to any assets, and the verb “dispose” has a corresponding meaning.
“Distribution” means (i) any payment or declaration of dividends, or any payment of royalties or fees of any kind, or the making of any other distribution, whether in cash or assets, (but expressly excluding any such distribution by way of the payment of dividends by the issuance of equity securities of the issuer) to any holder of shares of any class of the capital stock of, or any holder of any partnership or other ownership interest in, the Corporation or any Designated Subsidiary or (ii) any repurchase, redemption or other retirement or purchase for cancellation of shares in the capital stock of, or any other partnership or other ownership interest in, the Corporation or any Designated Subsidiary, or of any options, warrants or other rights to acquire any of such shares or interests.
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“EBITDA” means, for any period with respect to any Person, determined on a consolidated basis, the Net Income of such Person for such period:
(i) increased (without duplication) by the sum of:
(A) Total Interest Expense for such period;
(B) Income Tax Expense for such period; and
(C) Depreciation Expense for such period,
in each case to the extent that such amounts were included in the calculation of Net Income for such period; and
(ii) decreased by all cash payments made by such Person during such period relating to losses that were (or for previous periods not covered by the calculations under this Indenture would have been) added back into Net Income in determining EBITDA for any prior period.
“Event of Default” has the meaning set out in Section 8.01.
“Extraordinary Resolution” has the meaning set out in Section 11.12.
“Financial Year” means a financial year of the Corporation ending on December 31 of such year.
“Financial Quarter” means the period of three consecutive months ending on March 31, June 30, September 30 or December 31, as the case may be, of each Financial Year.
“Fixed Charge Coverage Ratio” means the ratio of the Corporation’s EBITDA to the Corporation’s Fixed Charges.
“Fixed Charges” means, without duplication, and on a consolidated basis, with respect to any Person, for any period, the sum of (i) Total Interest Expense of such Person, (ii) all debt repayments of such Person actually paid during such period, (iii) the amount of all Capital Expenditures of such Person actually incurred and paid in such period, (iv) all rental payments on Capitalized Lease Obligations paid during such period, (v) the aggregate amount actually incurred and paid during the period in respect of Investments, and (vi) all rent and other charges paid during such period with respect to all operating leases.
“GAAP” has the meaning set out in Section 1.07.
“Global Debenture” means a Debenture issued in the manner contemplated by Section 2.13.
“Government of Canada Yield” means, on any particular date, the yield to maturity compounded semi-annually that a non-callable Canadian dollar denominated Government of Canada bond would carry if issued at par in Canadian dollars on such date with a term to maturity equal to the remaining term of the applicable series of Debentures.
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“Governmental Authority” means any domestic or foreign legislative, executive, judicial or administrative body or Person having or purporting to have jurisdiction in the relevant circumstances.
“Guarantee Security” has the meaning set out in Section 7.01(l).
“Income Tax Expense” means, with respect to any Person, for any period, the aggregate of all Taxes on the income of such Person for such period, whether current or deferred (net of any incentive tax credits or other similar credits), determined on a consolidated basis in accordance with GAAP.
“Indenture” means this Trust Indenture, including its recitals and schedules, as amended, supplemented or restated from time to time.
“Investment” in any Person means any direct or indirect (i) acquisition of any shares of capital stock or other equity securities of such Person or (ii) acquisition, by purchase or otherwise, of all or substantially all of the business, assets or stock or other evidence of beneficial ownership of such Person. The amount of any Investment will be the original cost of such Investment, plus the cost of all additions thereto and minus the amount of any portion of such Investment repaid to such Person in cash as a return of capital, but without any other adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. In determining the amount of any Investment involving a transfer of any assets other than cash, such assets will be valued at its fair market value at the time of such transfer. For greater certainty, an Acquisition will not be treated as an Investment.
“Lien” means, in respect of any Person, any mortgage, debenture, pledge, hypothec, lien, charge, assignment by way of security, hypothecation or security interest granted or permitted by such Person or arising by operation of law, in respect of any of such Person’s assets, or any consignment or Capitalized Lease Obligation by such Person as consignee or lessee or any other security agreement, trust or arrangement having the effect of security for the payment of any debt, liability or obligation.
“Net Income” means, for any period, with respect to any Person, the net revenue of such Person, on a consolidated basis, for such period, less all expenses and other charges not otherwise deducted in computing such net revenue for such period, determined in accordance with GAAP, but excluding extraordinary items as determined in accordance with GAAP.
“Net Proceeds” means, with respect to any Disposition, the aggregate fair market value of the proceeds of such Disposition (whether such proceeds are in the form of cash or other assets or part cash and part other assets) net of reasonable, bona fide direct transaction costs and expenses incurred in connection with such Disposition including (i) reasonable legal fees and disbursements, the customary fees of agents or brokers payable in connection with such Disposition within one year of such Disposition and title and recording expenses payable in connection with such Disposition and (ii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Debt that is secured by a Permitted Lien, if any, on any of the assets that are the subject matter of such Disposition ranking in priority to the Lien of the security created hereby and that is required to be repaid under the terms of such Debt as a result of such Disposition.
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“Participating Shares” means shares of a corporation that carry a residual right to participate to an unlimited degree in earnings of the issuer and in its assets upon liquidation or winding-up.
“Permitted Acquisition” means
(i) [●] and
(ii) [●].
“Permitted Debt” means:
(i) Debt under this Agreement;
(ii) Debt in respect of Purchase Money Security Interests granted by the Corporation or any of its Designated Subsidiaries in an amount not to exceed Cdn.$[●] in the aggregate; and
(iii) [●].
“Permitted Distribution” means [●].
“Permitted Investment” means [●].
“Permitted Liens” means, with respect to any Person, the following:
(i) liens for taxes, rates, assessments or other governmental charges or levies not yet due, or for which instalments have been paid based on reasonable estimates pending final assessments, or if due, the validity of which is being contested diligently and in good faith by appropriate proceedings by that Person;
(ii) undetermined or inchoate liens, rights of distress and charges incidental to current operations which have not at such time been filed or exercised, or which relate to obligations not due or payable, or if due, the validity of which is being contested diligently and in good faith by appropriate proceedings by that Person;
(iii) reservations, limitations, provisos and conditions expressed in any original grants from the Crown or other grants of real or immovable property, or interests therein, that do not materially affect the use of the affected land for the purpose for which it is used by that Person;
(iv) licences, easements, rights-of-way and rights in the nature of easements (including licences, easements, rights-of-way and rights in the nature of easements for railways, sidewalks, public ways, sewers, drains, gas, steam and water mains or electric light and power, or telephone and telegraph conduits, poles, wires and cables) that do not materially impair the use of the affected land for the purpose for which it is used by that Person;
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(v) title defects, or irregularities or other matters relating to title that are of a minor nature and in the aggregate do not materially impair the use of the affected property for the purpose for which it is used by that Person;
(vi) the right reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit acquired by that Person or by any statutory provision to terminate any such lease, licence, franchise, grant or permit, or to require annual or other payments as a condition to the continuance thereof;
(vii) the Lien resulting from the deposit of cash or securities in connection with contracts, tenders or expropriation proceedings, or to secure workmen’s compensation, unemployment insurance, surety or appeal bonds, costs of litigation when required by law not to exceed Cdn.$[●] in aggregate outstanding at any time, liens and claims incidental to current construction, mechanics’, warehousemen’s, carriers’ and other similar liens, and public, statutory and other like obligations incurred in the ordinary course of business;
(viii) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of its business;
(ix) the Lien created by a judgement of a court of competent jurisdiction, as long as the judgement is being contested diligently and in good faith by appropriate proceedings by that Person and does not result in an Event of Default;
(x) the Lien of the security created hereby; and
(xi) any Lien securing Permitted Debt.
“Person” includes any individual, corporation, limited or unlimited liability company, general or limited partnership, association, trust, unincorporated organization, joint venture and Governmental Authority.
“Purchase Money Security Interest” means a Lien securing Debt incurred to finance the Acquisition of assets, provided that (i) such Lien is created substantially simultaneously with the Acquisition of such assets, (ii) such Lien does not at any time encumber any assets other than the assets financed by such Debt, (iii) the amount of Debt secured thereby is not increased subsequent to such Acquisition and (iv) the principal amount of Debt secured by any such Lien at no time exceeds 100% of the original purchase price of such assets at the time they were acquired, and for the purposes of this definition the term “Acquisition” will include a Capitalized Lease Obligation and the term “acquire” will have a corresponding meaning.
“Redemption Date” means, with respect to any Debenture, the date specified in a notice of redemption as the date on which such Debenture will be redeemed.
“Redemption Price” means, with respect to any Debenture, the aggregate amount payable in respect of the redemption of such Debenture including the principal amount thereof, any premium and unpaid interest accrued thereon.
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“Required Rating” means, in respect of any Person, a rating of such Person’s short term indebtedness of R-1 (middle) or better from DBRS (or an equivalent rating should such designation change) or such lower rating as DBRS may permit for any particular purpose or, in the event that such Person is not rated by DBRS, the lower of the rating by Standard and Poor’s, a division of the McGraw-Hill Companies, Inc. or Moody’s Investors Service, Inc. or either of their successors in respect of such Person, provided that such rating is equivalent to a rating of R-1 (middle) or better from DBRS.
“Requirements of Environmental Law” means all requirements of the common law or of statutes, regulations, by-laws, ordinances, treaties, judgements and decrees, and (to the extent that they have the force of law) rules, policies, guidelines, orders, approvals, notices, permits, directives, and the like, of any federal, territorial, provincial, state, regional, municipal or local judicial, regulatory or administrative agency, board or Governmental Authority in Canada and any other jurisdiction in which the Corporation or any Designated Subsidiary has assets relating to environmental or occupational health and safety matters and the assets and undertaking of the Corporation or any Designated Subsidiary and the intended uses thereof including, but not limited to, all such requirements relating to: (i) the protection, preservation or remediation of the natural environment (the air, land, surface water or groundwater); (ii) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation; and (iii) hazardous substances or conditions (matters that are prohibited, controlled or otherwise regulated, such as contaminants, pollutants, toxic substances, dangerous goods, wastes, hazardous wastes, liquid industrial wastes, hazardous materials, urea formaldehyde foam type of insulation, asbestos or asbestos-containing materials, polychlorinated biphenyls (PCBs) or PCB contaminated fluids or equipment, explosives, radioactive substances, petroleum and associated products, underground storage tanks or surface impoundments).
“Securities” has the meaning set out in Section 4.01(a)(viii).
“Senior Debt” means, for any period, with respect to any Person, on a consolidated basis, without duplication, the Debt of such Person but excluding (i) current trade payables, accrued liabilities, minority interest, income taxes payable and deferred income taxes and (ii) Subordinated Debt.
“Senior Debt to EBITDA Ratio” means the ratio of the Corporation’s Senior Debt to the Corporation’s EBITDA.
“Series A Debentures” has the meaning set out in Section 2.02.
“Shareholders’ Equity” means, at any date, with respect to any corporation, the aggregate of (i) the stated capital of the shares of all classes in the capital of a corporation, (ii) any surplus, whether contributed or capital and (iii) retained earnings, all as set forth or reflected in the most recent consolidated balance sheet of such corporation.
“Subordinated Debt” means any other Debt that is expressly subordinated in right of payment to the Debentures.
“Subsidiary” mean, in relation to any Person, (i) any corporation of which Voting Shares carrying more than 50% of the voting rights attached to all outstanding Voting Shares of the corporation are owned, directly or indirectly, by or for such Person or (ii) any other Person of which at least a majority of the voting interest therein under ordinary circumstances is owned, directly or indirectly, by or for such Person.
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“Successor Corporation” has the meaning set out in Section 10.01.
“Tangible Net Worth” means, for any period, with respect to any Person, without duplication, the Shareholders Equity of such Person but excluding such Person’s intangible assets, all as determined in accordance with GAAP.
“Tax” or “Taxes” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, franchise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments, royalties, duties, deductions, compulsory loans or similar charges in the nature of a tax including Canada Pension Plan and provincial pension plan contributions, employment insurance payments and workers compensation premiums, together with any instalments, and any interest, fines and penalties, imposed by any Governmental Authority, whether disputed or not.
“Total Interest Expense” means, for any period, with respect to any Person, without duplication, the aggregate amount of interest and other financing charges expensed by such Person on account of such period with respect to Debt including interest, discount and financing fees, commissions, discounts, the interest or time value of money component of costs related to factoring or securitizing receivables or monetizing inventory and other fees and charges payable with respect to letters of credit, letters of guarantee and bankers’ acceptances, standby fees and the interest component of Capitalized Lease Obligations, but excluding any amount, such as amortization of debt discount and expenses, that would qualify as Depreciation Expense and the amount reflected in Net Income for such period in respect of gains (or losses) attributable to the translation of Debt from one currency to another currency, all as determined on a consolidated basis in accordance with GAAP.
“Trustee” means [●] and its successors for the time being in the trusts hereby created.
“Uncertificated Security” means a Security that is not represented by a certificate.
“Voting Shares” means shares of any class of a corporation carrying voting rights generally under all circumstances.
1.02 Meaning of “Outstanding” for Certain Purposes
Every Debenture certified and delivered by the Trustee hereunder will be deemed to be outstanding until it is cancelled or delivered to the Trustee for cancellation or money for the payment thereof has been set aside pursuant to Article 9, provided that:
(a) Debentures that have been partially redeemed will be deemed to be outstanding only to the extent of the unredeemed part of the principal amount thereof;
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(b) if a new Debenture has been issued in substitution for a Debenture that has been mutilated, lost, stolen or destroyed, only one of them will be counted for the purpose of determining the aggregate principal amount of Debentures outstanding; and
(c) for the purpose of any provision of this Indenture entitling holders of Debentures to vote, sign consents, requests or other instruments or take any other action or constitute a quorum under this Indenture, Debentures owned legally or equitably by the Corporation or any Affiliate of the Corporation will be disregarded except that
(i) for the purpose of determining whether the Trustee will be protected in relying on any such vote, consent, request or other instrument or other action or the existence of such a quorum, only the Debentures that the Trustee knows are so owned will be so disregarded and
(ii) Debentures so owned that have been pledged in good faith other than to the Corporation or any Affiliate of the Corporation will not be so disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to vote such Debentures in the pledgee’s discretion free from the control of the Corporation or such Affiliate.
1.03 Headings
The division of this Indenture into Articles, Sections and Schedules and the insertion of a table of contents and headings are for convenience of reference only and do not affect the construction or interpretation of this Indenture. The terms “hereof”, “hereunder” and similar expressions refer to this Indenture and not to any particular Article, Section, Schedule or other portion hereof. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles, Sections and Schedules are to Articles and Sections of and Schedules to this Indenture.
1.04 Extended Meanings
In this Indenture, words importing the singular number only include the plural and vice versa and words importing any gender include all genders. The term “including” means “including without limiting the generality of the foregoing”.
1.05 Applicable Law
This Indenture and the Debentures will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein. Each of the parties hereto irrevocably attorns to the non-inclusive jurisdiction of the courts of the Province of Ontario.
1.06 Language
The parties hereto expressly request and require that this document and all documents related thereto be drawn up in English. Les parties aux présentes conviennent et exigent que cette entente et tous les documents qui s’y rattachent soient rédigés en anglais. In the event of any contradiction, discrepancy or difference between the English language version and the French language version of the text of the forms of Debentures, the English language version of the text will govern.
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1.07 Accounting Principles
Wherever in this Indenture reference is made to a calculation to be made or an action to be taken in accordance with generally accepted accounting principles or “GAAP”, such reference will be deemed to mean such accounting principles as are generally accepted in the United States at the date of such calculation, action or computation. For the purpose of determining compliance with the financial ratios and financial covenants contained in this Indenture, all calculations will be made on the basis of a consolidation of the accounts of the Corporation and the Designated Subsidiaries and the phrase “on a consolidated basis” contained in the defined terms used in connection with such determination will be construed accordingly.
1.08 Interest Calculations and Payment
Unless otherwise stated, wherever reference is made in this Indenture to a rate of interest “per annum” or a similar expression is used, such interest will be calculated on the basis of a calendar year of 365 days or 366 days, as the case may be, and using the nominal rate method of calculation, and will not be calculated using the effective rate method. All payments of interest to be made hereunder will be made without allowance or deduction for deemed re-investment or otherwise, both before and after maturity and both before and after any default or judgment or both, until payment thereof, and interest will accrue on any overdue interest.
1.09 Interest Act (Canada)
For the purposes of disclosure under the Interest Act (Canada), whenever interest to be paid hereunder is to be calculated on the basis of a year of 360 days or any other number of days that is less than the number of days in a calendar year, the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent is the rate so determined multiplied by a fraction of which the numerator is the actual number of days in the calendar year in which the same is to be ascertained and the denominator is either 360 or such other number of days, as the case may be.
1.10 Statutory References
In this Indenture, unless something in the subject matter or context is inconsistent therewith or unless otherwise herein provided, a reference to any statute is to that statute as now enacted or as the same may from time to time be amended, re- enacted or replaced and includes any regulation made thereunder.
1.11 Day Not a Business Day
Unless otherwise stated, in the event that any day on which, or on or before which, any action is required to be taken hereunder or under a Debenture is not a Business Day, then such action must be taken on or before the required time on the next succeeding day that is a Business Day.
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1.12 Currency
Except where otherwise expressly stated, all references to currency herein are to lawful money of Canada.
1.13 Shareholders, Directors and Officers Exempt from Individual Liability
No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Debenture or coupon, or because of any indebtedness evidenced thereby can be had against any past, present or future shareholder, director or officer, as such, of the Corporation or of any successor, either directly or through the Corporation or any successor, under any Applicable Law or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of any Debenture or coupon appertaining thereto by the holder thereof and as part of the consideration for the issue of such Debenture and any coupon appertaining thereto.
1.14 Schedules
The following are the Schedules to this Indenture:
| Schedule 2.02 | - | Form of Series A Debentures | |
| Schedule 4.01(a)(i) | - | Real Property | |
| Schedule 7.01(k) | - | Form of Guarantee Agreement | |
| Schedule 7.01(l) A | - | Form of Floating Charge Debenture | |
| Schedule 7.01(l) B | - | Form of Debenture Pledge Agreement | |
| Schedule 7.01(l) C | - | Form of Share Pledge Agreement | |
| Schedule 7.02(c) | - | Form of Compliance Certificate |
ARTICLE 2 -- THE DEBENTURES
2.01 Amount Unlimited; Issuable in Series
The aggregate principal amount of Debentures that may be issued hereunder is unlimited. The Debentures may be issued in one or more series subject to compliance with the terms and conditions herein set forth.
2.02 Designation, Terms and Form of Series A Debentures
The first series of Debentures authorized to be issued will:
(a) consist of and be limited to an aggregate principal amount of $[●];
(b) be designated “[●]% Debentures, Series A” (the “Series A Debentures”);
(c) bear interest from the date of issuance (subject to Section 2.12) at the rate of [●]% per annum payable semi-annually on April 30 and October 31 in each year commencing on [●];
(d) mature on [●];
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(e) be issuable as fully registered Debentures in denominations of $1,000 and integral multiples thereof;
(f) be substantially in the form set out in Schedule 2.02 with such insertions, deletions, substitutions and variations as may be required or permitted by the terms of this Indenture or as may be required to comply with any law or the rules of any securities exchange as may be determined by the officers of the Corporation executing any Series A Debenture;
(g) be in the English and French languages; and
(h) bear such distinguishing letters and numbers as the Trustee may approve.
2.03 Issue of Series A Debentures
Series A Debentures in the aggregate principal amount specified in the Order of the Corporation referred to below, but in any event not more than $[●], will forthwith be executed by the Corporation and certified by the Trustee and delivered by the Trustee to, or to the order of, the Corporation upon receipt of the following:
(a) a Certified Resolution authorizing the issuance, certification and delivery of a specified principal amount of Series A Debentures;
(b) an Order of the Corporation for the certification and delivery of such Debentures specifying the principal amount of the Series A Debentures to be certified;
(c) an opinion of Counsel in favour of the Trustee that all legal requirements in connection with the issue of such Debentures have been complied with; and
(d) such certificate as the Corporation is required to furnish to the Trustee pursuant to Section 13.06 in connection with the issue, certification and delivery of the Series A Debentures.
2.04 Debentures to Rank Pari Passu
All Debentures will rank pari passu without discrimination, preference or priority whatever may be the actual date or terms of issue of the Debentures except as to sinking funds, if any, for the exclusive benefit of Debentures of different series or different maturities.
2.05 Signing of Debentures
The Debentures will be signed by any two of the Chief Executive Officer, Chief Financial Officer and [●] of the Corporation. The signatures of such officers may be mechanically reproduced and Debentures bearing such signatures will be binding upon the Corporation as if they had been manually signed by such officers. Notwithstanding that any of the individuals whose signature appears on any Debenture as one of such officers may no longer hold office at the date hereof or at the date of such Debenture or at the date of certification and delivery thereof, any Debenture signed as aforesaid will be valid and binding upon the Corporation and be entitled to the benefit of this Indenture.
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2.06 Certification by Trustee
(a) No Debenture will be obligatory or entitle the holder to the benefit hereof until it has been certified by the Trustee in substantially the form of the certificate provided for the Debentures of the series being issued or in some other form approved by the Trustee. Certification by the Trustee will be conclusive evidence as against the Corporation that the Debenture so certified has been duly issued and is a valid obligation of the Corporation and that the holder is entitled to the benefit hereof.
(b) The certificate of the Trustee on Debentures will not be construed as a representation or warranty by the Trustee as to the validity of this Indenture or of the Debentures (except the due certification thereof and any other warranties imposed by Applicable Law) and the Trustee will in no respect be liable or answerable for the use made of the Debentures or any of them or of the proceeds thereof.
2.07 Replacement of Debentures
(a) If any Debenture is mutilated or lost, destroyed or stolen, the Corporation will, in the absence of notice that such Debenture has been acquired by a bona fide purchaser (as defined in the Business Corporations Act (British Columbia)) and subject to Section 2.07(b), issue, and the Trustee will certify and deliver, a new Debenture of like date and tenor as the one mutilated, lost, destroyed or stolen in exchange for and upon surrender and cancellation of such mutilated Debenture or in lieu of and in substitution for such lost, destroyed or stolen Debenture, and the new Debenture will be entitled to the benefit hereof and rank equally in accordance with its terms with all other Debentures of the same series.
(b) The applicant for the issue of a new Debenture pursuant to this Section 2.07 must bear the reasonable charges of the Corporation and the Trustee or other registrar in connection therewith and in case of loss, destruction or theft must, as a condition precedent to the issue thereof, furnish to the Corporation and to the Trustee or other registrar such evidence of ownership and of the loss, destruction or theft of the Debenture so lost, destroyed or stolen as is satisfactory to the Corporation in its discretion and such applicant will also furnish an indemnity in amount and form satisfactory to the Corporation in its discretion.
2.08 Computation of Interest
(a) Debentures, whether issued originally or upon exchange or in substitution for previously issued Debentures, will bear interest from and including their date of issuance or from and including the last interest payment date on which interest on the Debentures has been paid or made available for payment, whichever is the later, to but excluding the earlier of (a) if called for redemption, the date fixed for redemption and (b) their maturity date, unless, upon due presentation, payment of the redemption price or amount payable on maturity, as the case may be, of any Debenture is improperly withheld or refused.
(b) The coupons (if any) matured at the date of delivery by the Trustee of any coupon Debenture will be detached therefrom and cancelled before delivery, unless such Debenture is being issued in exchange or in substitution for a previously issued Debenture (whether in interim or definitive form) and such matured coupons represent unpaid interest to which the holder of such exchanged or substituted Debenture is entitled.
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2.09 Payment
(a) Except as otherwise provided in Sections 2.09(b) and 2.10, as interest becomes due on each Debenture (except interest payable at maturity or on redemption which may, at the option of the Corporation, be paid on presentation and surrender of a Debenture for payment) the Corporation will send or cause to be sent, at least three Business Days prior to each interest payment date, by prepaid ordinary mail a cheque for such interest (less any tax required to be deducted or withheld) payable to the holder of such Debenture and addressed to the holder at the holder’s last address appearing on the register unless otherwise directed in writing by the holder or, in the case of joint holders, payable to all of them and addressed to one of such joint holders at such holder’s last address appearing on the register unless otherwise directed in writing by all of them. The forwarding of such cheque will satisfy and discharge the liability for interest on such Debenture to the extent of the sum represented thereby (plus the amount of any tax deducted or withheld) unless such cheque is not paid on presentation at any of the places where such interest is payable. Notwithstanding the foregoing, in the event of the non-receipt of any such cheque by the holder of such Debenture or the loss, theft or destruction thereof, the Corporation upon being furnished with reasonable evidence of such non-receipt, loss, theft or destruction and an indemnity reasonably satisfactory to it will issue to such holder a replacement cheque for the amount of such cheque.
(b) If directed by the holder of a Debenture, the Corporation will, on the due date, pay such interest (less any tax required to be deducted or withheld) by electronic funds transfer to an account maintained by the holder with a bank in Canada. Any such direction to the Corporation must be in writing and received by the Corporation and the Trustee at least 15 Business Days prior to any interest payment date. Any payment of interest pursuant to the provisions of this Section 2.09(b) will be valid and binding on the Corporation, the Trustee and all holders of Debentures.
2.10 Payment Agreements for Debentures
Notwithstanding anything contained in this Indenture to the contrary, the Corporation may enter into an agreement with the holder of a Debenture or with the Person for whom such holder is acting as nominee providing for the payment, without presentation or surrender of the Debenture or notation of payment thereon, to such holder of the principal sum of, any premium and interest on such Debenture and all other money payable hereunder at a place, and by electronic funds transfer or in such other manner, other than the places or the manner specified in this Indenture and in such Debenture as the places and the manner for such payment. Any payment of the principal of, any premium and interest on any such Debenture and other money payable hereunder at such other place or in such other manner pursuant to such agreement will, notwithstanding any other provision of this Indenture or the Debentures, be valid and binding on the Corporation, the Trustee and all holders of Debentures.
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2.11 Creation and Issue of Additional Debentures
(a) The Directors may from time to time authorize the creation of any one or more subsequent series of Debentures hereunder. The Debentures of any such subsequent series (“Additional Debentures”) will contain such terms as the Directors may determine.
(b) Prior to the issuance of any Additional Debentures, the Corporation will execute and deliver to the Trustee an indenture supplemental hereto for the purpose of establishing the terms thereof and the forms and denominations in which they may be issued, together with a Certified Resolution authorizing the same, and the Trustee will execute and deliver such supplemental indenture pursuant to Article 12.
(c) Whenever any series of Additional Debentures has been authorized, they may from time to time be executed by the Corporation and delivered to the Trustee, and subject to Sections 2.09(b) and 13.06, must be certified by the Trustee and delivered by the Trustee to or to the order of the Corporation upon receipt by the Trustee of:
(i) a Certified Resolution authorizing the issuance, certification and delivery of a specified principal amount of Debentures of such subsequent series;
(ii) an Order of the Corporation for the certification and delivery of such Debentures specifying the principal amount of the Debentures to be certified and delivered;
(iii) an opinion of Counsel in favour of the Trustee to the effect that all legal requirements in connection with the issue of such Debentures have been complied with; and
(iv) such certificate as the Corporation is required, pursuant to Section 13.06, to furnish to the Trustee in connection with the issue, certification and delivery of the Debentures.
2.12 Interim Debentures
Pending the delivery of definitive Debentures of any series to the Trustee, the Corporation may issue and the Trustee may certify interim Debentures, with or without coupons, in such forms and in such denominations and signed in such manner as the Trustee and the Corporation may approve, entitling the holders thereof to definitive Debentures of the said series when they are ready for delivery. When so issued and certified, the interim Debentures will, for all purposes, be deemed to be Debentures and, pending the exchange thereof for definitive Debentures, the holders of the interim Debentures will be entitled to the benefit of this Indenture to the same extent and in the manner as though such exchange had actually been made. Forthwith after the Corporation has executed and delivered the definitive Debentures to the Trustee, the Trustee must call in for exchange all interim Debentures that have been issued and forthwith after such exchange will cancel the interim Debentures together with any unmatured coupons pertaining thereto. No charge will be made by the Corporation or by the Trustee to the holders of such interim Debentures for such exchange. All interest paid upon interim Debentures without coupons will be noted thereon as a condition precedent to such payment unless paid by cheque to the registered holders thereof.
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2.13 Global Debentures
(a) At the Corporation’s option, any of the Debentures may be represented in the form of fully registered Global Debentures held by, or on behalf of, a Depositary as custodian of the Global Debentures (for its participants) and registered in the name of the Depositary or its nominee. It is expressly acknowledged that any registrations of ownership and transfers of such Debentures will be made only through the record entry securities transfer and pledge system administered by the Depositary in accordance with the Depositary’s operating rules and procedures for security settlement in force from time to time (the “Book Based System”). The rights of the holder of any interest in the Debentures represented by a Global Debenture (including the right to receive a certificate or other instrument evidencing an ownership interest in such Debenture) will be limited to those established by Applicable Law and agreements between the Depositary and its participants and between such participants and holders of such interest.
(b) Every Global Debenture of a series authenticated and delivered by the Trustee must bear a legend in substantially the following form:
THIS DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE TRUST INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A REGISTERED DEBENTURE, AND NO TRANSFER OF THIS DEBENTURE IN WHOLE OR IN PART MAY BE REGISTERED IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST INDENTURE.
(c) Each Global Debenture authenticated hereunder must be registered in the name of the Depositary designated for such Global Debenture or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Debenture will constitute a single Debenture for all purposes of this Indenture. Neither the Corporation nor the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made by any Depositary on account of the beneficial interests in any Global Debenture. Except as provided in this Section 2.13, owners of beneficial interests in any Global Debenture will not be entitled to have Debentures registered in their names, receive or be entitled to receive Debentures in definite form or be considered owners or holders thereof hereunder. Nothing herein prevents the owners of beneficial interests in Global Debentures from voting using duly executed proxies.
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(d) Notwithstanding any other provision in this Indenture, no Global Debenture may be exchanged in whole or in part for registered Debentures, and no transfer of a Global Debenture in whole or in part may be registered in the name of any Person other than the Depositary for such Global Debenture or a nominee thereof unless:
(i) such Depositary:
(A) has notified the Corporation that it is unwilling or unable to continue as Depositary for such Global Debenture;
(B) has ceased to be a Clearing Agency (registered, if required, under the securities legislation governing such Global Debenture) or otherwise ceased to be eligible to be a depositary;
(C) has been notified by the Corporation, at the Corporation’s option, that the Corporation elects or is required by law to terminate the book entry system through such Depositary or otherwise; or
(D) an Event of Default has occurred and is continuing.
ARTICLE 3 -- REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP
3.01 Fully Registered Debentures
(a) With respect to each series of Debentures consisting in whole or in part of fully registered Debentures, the Corporation must cause to be kept a central register at the principal office of the Trustee in [●] and branch registers at the principal office of the Trustee, or such other registrar as the Corporation may appoint, wherever specified in such Debentures, and at such other places as the Corporation may designate with the approval of the Trustee. Each register will contain all particulars required by Applicable Law including the names and latest known addresses of the holders of Debentures of such series and particulars of the Debentures held by them and of all transfers of such Debentures. Each branch register will contain the same particulars as the central register but only with respect to Debentures issued or transferred at the office at which such branch register is kept. The registration of any Debenture will be noted on such Debenture by the Trustee or other registrar.
(b) No transfer of a fully registered Debenture will be valid unless made on one of the registers herein provided for by the registered holder or such holder’s executors, administrators or other legal representatives or such holder’s attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee or other registrar upon compliance with such reasonable requirements as the Trustee or other registrar may prescribe, nor unless the name of the transferee has been noted on the Debenture by the Trustee or other registrar.
3.02 Coupon Debentures
(a) Title to coupon Debentures issued hereunder will pass by delivery unless registered for the time being as hereinafter provided. Notwithstanding registration of coupon Debentures as to principal, the coupons when detached will continue to be payable to bearer and title thereto will pass by delivery.
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(b) With respect to each series of Debentures consisting in whole or in part of coupon Debentures registrable as to principal only, the Corporation will cause to be kept a central register at the principal office of the Trustee in [●] and branch registers at the principal office of the Trustee, or such other registrar as the Corporation may appoint, wherever specified in such Debentures and at such other places as the Corporation may designate with the approval of the Trustee, in which holders of such Debentures may register the same as to principal only. Each register will contain all particulars required by Applicable Law including the names and latest known addresses of the holders of Debentures of such series and particulars of the Debentures held by them and of all transfers of such Debentures. Each branch register will contain the same particulars as the central register but only with respect to Debentures issued or transferred at the office at which such branch register is kept. The registration of any Debenture will be noted on such Debenture by the Trustee or other registrar.
(c) After registration of a coupon Debenture, no transfer thereof will be valid unless made on one of such registers by the registered holder or such holder’s executors, administrators or other legal representatives or such holder’s attorney duly appointed by an instrument in writing in form and execution satisfactory to the Trustee or other registrar upon compliance with such reasonable requirements as the Trustee or other registrar may prescribe, or unless the name of the transferee has been noted on the Debenture by the Trustee or other registrar. Any such Debenture may be discharged from registration by being transferred to bearer after which it will be transferable by delivery but may again from time to time be registered and discharged from registration.
3.03 Exchange of Debentures
(a) Subject to Section 3.06, Debentures of any series and any denomination may be exchanged for Debentures of the same series and same aggregate principal amount in any other authorized denominations for such series.
(b) Such exchanges may be made upon reasonable notice at the principal office of the Trustee in [●] or at the principal office of the Trustee or other registrar wherever specified in the fully registered Debentures of such series or at such other places as the Corporation may designate with the approval of the Trustee. Any Debenture tendered for exchange will be surrendered and cancelled. The Corporation will execute and the Trustee will certify all Debentures necessary to carry out such exchanges.
3.04 Charges for Transfer and Exchange
(a) Except as provided in Sections 3.04(b) and 5.03, for each Debenture exchanged or transferred, if required by the Corporation and subject to any limitation prescribed by Applicable Law, the Trustee may make a reasonable charge for its services and for any new Debenture issued, and payment of such charges and reimbursement of the Trustee or the Corporation for any transfer taxes or governmental or other charges required to be paid must be made by the party requesting such exchange or transfer as a condition precedent thereto.
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(b) No charge to a Debentureholder will be made hereunder:
(i) for any transfer or exchange of any Debenture applied for within the period of two months from and including the date of such Debenture;
(ii) for any exchange after the expiration of such two-month period of any Debenture issued within such period in a denomination in excess of $[●] for Debentures of smaller denominations; or
(iii) for any exchange of any Debenture that has been issued under Sections 2.06 or 5.03 in a denomination in excess of $[●] for Debentures of smaller denominations.
3.05 Inspection of Registers and Lists of Holders
(a) The registers provided for in Sections 3.01 and 3.02 will at all reasonable times be open for inspection by the Corporation, the Trustee or any holder of Debentures of the series to be inspected.
(b) Every registrar, including the Trustee, will from time to time
(i) at the request of the Corporation or the Trustee, furnish the Corporation or the Trustee with a list of the names and addresses of the holders of Debentures entered on the register kept by such registrar for that series, showing the principal amount of the Debentures held by each such holder and the aggregate principal amount of the Debentures and
(ii) at the request of any holder of Debentures of such series, furnish such a list to such holder upon fulfillment by such holder of the conditions prescribed by Applicable Law in that respect.
3.06 Closing of Registers
(a) Neither the Corporation nor the Trustee nor any other registrar will be required
(i) to make transfers or exchanges of any Debenture of any series on any interest payment date for the Debentures of that series or during the 10 preceding Business Days or
(ii) to make transfers or exchanges of any Debenture of any series,
(A) on the day of any selection by the Trustee of Debentures of that series to be redeemed or during the 10 preceding Business Days or
(B) that has been selected or called for redemption in whole or in part unless, upon due presentment thereof for redemption, such Debenture is not redeemed.
(b) Subject to any restriction herein, the Corporation with the approval of the Trustee may at any time close any register for any series of Debentures, other than that kept at the principal office of the Trustee in [●], and transfer the registration of the Debentures registered thereon to another register and thereafter such Debentures will be deemed to be registered on such other register. Notice of such transfer will be given to the holders of such Debentures.
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3.07 Ownership of Debentures
(a) Unless otherwise required by Applicable Law, the Person in whose name any Debenture is registered will for all purposes of this Indenture be deemed to be the owner thereof and payment of or on account of the principal of such Debenture and any premium and interest thereon will be made only to or upon the order in writing of such registered holder.
(b) Unless otherwise required by Applicable Law, the Corporation and the Trustee may treat the bearer of any unregistered Debenture and the bearer of any coupon, whether or not the Debenture from which it has been detached is registered as to principal, as the absolute owner of such Debenture or coupon, as the case may be, for all purposes and neither the Corporation nor the Trustee nor any registrar will be affected by any notice to the contrary.
(c) Neither the Corporation nor the Trustee or other registrar will be bound to take notice of or see to the performance or observance of any duty owed to a third Person, whether under a trust, express, implied, resulting or constructive in respect of any Debenture or otherwise, by the registered holder or any Person who the Corporation or the Trustee treats, as permitted or required by Applicable Law, as the owner or the registered holder of such Debenture.
(d) The registered holder for the time being of any registered Debenture and the bearer of any unregistered Debenture and the bearer of any coupon will be entitled to the principal, any premium and interest evidenced by such instrument, free from all equities or rights of set-off or counterclaim between the Corporation and the original or any intermediate holder thereof except in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction, and all Persons may act accordingly and the receipt of any such holder for any such principal, premium or interest will be a good discharge to the Corporation and the Trustee for the same and neither the Corporation nor the Trustee will be bound to inquire into the title of any such holder save as aforesaid.
(e) The Corporation and the Trustee may treat the holder of any Debenture as the owner thereof without actual production of such Debenture for the purpose of any Debentureholders’ Request, requisition, direction, consent, instrument or other document. Upon receipt of a certificate of any bank, trust company or other depositary satisfactory to the Trustee stating that the unregistered Debentures specified therein have been deposited by a named Person with such bank, trust company or other depositary and will remain so deposited until the expiry of the period specified therein, the Corporation and the Trustee may treat the Person so named as the owner, and such certificate as sufficient evidence of the ownership by such Person during such period, of such Debentures, for the purpose of any Debentureholder’s Request, requisition, direction, consent, instrument or other document to be made, signed or given by the holder of the Debenture so deposited.
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ARTICLE 4 -- SECURITY
4.01 Fixed and Floating Charge
As general and continuing security for the due payment of the principal of and interest (including interest on amounts in default) and any premium on the Debentures and of all other money from time to time owing pursuant to the terms of this Indenture and on the Debentures and the due performance by the Corporation of all of its obligations hereunder, subject to the reservation as to leaseholds hereinafter set forth, the Corporation hereby:
(a) grants a security interest in the present and future undertaking and assets, both real and personal, of the Corporation (the “Collateral”), assigns the Collateral and mortgages, pledges and charges the Collateral as and by way of a fixed and specific mortgage, pledge and charge, in each case to the Trustee as trustee for the Debentureholders. Without limiting the generality of the foregoing, the Collateral includes all right, title and interest that the Corporation now has or may hereafter have, be possessed of, be entitled to, or acquire, by way of amalgamation or otherwise, in all assets of the following kinds:
(i) real property, leaseholds of real property and interests and rights therein described in Schedule [●];
(ii) buildings, erections, structures, improvements and fixtures situate on or forming part of the property referred to in Section 4.01(a)(i);
(iii) machinery, equipment, plant, furniture, vehicles and other tangible personal property which are not inventory;
(iv) debts, accounts, claims and choses in action for monetary amounts which are now or which may hereafter become due, owing or accruing due to the Corporation;
(v) inventory of whatever kind and wherever situate including all goods held for sale or lease or furnished or to be furnished under contracts for service or that are raw materials, work in process or material used or consumed in the business of the Corporation;
(vi) chattel paper;
(vii) warehouse receipts, bills of lading and other documents of title, whether negotiable or not;
(viii) shares, stock, warrants, bonds, debentures, debenture stock and other securities (collectively, “Securities”);
(ix) bills, notes or cheques within the meaning of the Bills of Exchange Act (Canada) and letters of credit;
(x) intangibles not otherwise described in this Section 4.01(a) including all goodwill, patents, trademarks, copyrights and other industrial property;
(xi) coins or bills or other medium of exchange adopted for use as part of the currency of Canada or of any foreign government;
(xii) books, papers, accounts, invoices, documents and other records in any form evidencing or relating to any of the Collateral and all rights and benefits in respect thereof; and
(xiii) proceeds of any Collateral in any form derived, directly or indirectly, from any dealing with the Collateral or that indemnifies or compensates for the loss of or damage to the Collateral; and
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(b) grants to the Trustee a security interest in the present and future undertaking and assets, both real and personal, of the Corporation and charges as and by way of a floating charge to the Trustee, all its present and future undertaking and assets, both present and future, of every nature and kind and wherever situate (other than such as are validly subjected to the fixed and specific mortgage and charge hereby created) of which it may be possessed of, entitled to, or acquire, now or hereafter, and any and all proceeds of any of the foregoing.
To have and to hold the Collateral and the mortgages, pledges, charges, security interests and assignments thereof and all rights hereby conferred unto the Trustee, its successors and assigns, forever, but in trust, nevertheless, for the equal benefit and security of all the Debentureholders without any preference or priority except as otherwise specifically provided herein, and with the powers and authorities and subject to the terms and conditions set forth in this Indenture.
4.02 Pledged Securities
In connection with the pledge of the Securities:
(a) the Corporation must:
(i) with respect to all Collateral that is a Certificated Security or an Uncertificated Security credited on the books of the Clearing Agency, promptly notify the Trustee thereof and promptly (A) take all actions required to comply with the applicable rules of such Clearing Agency, (B) take all actions required to perfect the security interest of the Trustee in such Collateral under Applicable Law, and (C) take all such further and other actions as the Trustee, acting reasonably, deems necessary or desirable to effect the foregoing;
(ii) with respect to all Collateral that are Certificated Securities (other than a Certificated Security credited on the books of the Clearing Agency) deliver to the Trustee all certificates, instruments and securities representing or evidencing such Securities in suitable form for transfer by delivery, or accompanied by duly executed instruments of transfer or assignment in blank, in each case satisfactory to the Trustee, all of which certificates, instruments and securities will remain in the custody of the Trustee; and
(iii) with respect to all Collateral that are Uncertificated Securities (other than an Uncertificated Security credited on the books of the Clearing Agency) cause the issuer of such Uncertificated Securities to duly authorize and execute, and deliver to the Trustee, an agreement for the benefit of the Trustee and the Debentureholders, in form and substance satisfactory to the Trustee, acting reasonably, pursuant to which such issuer agrees to comply with any and all instructions originated by the Trustee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security originated by any other Person other than a court of competent jurisdiction;
(b) subject to Section 4.02(d), the Trustee must pay over to the Corporation any cash dividends or cash distributions received by or for it upon or in respect of such Securities; provided, however, that the Corporation is not entitled to receive any stock dividends in respect of the Securities and all such stock dividends and capital money (including repayments of capital and cash proceeds on a redemption of Securities) must be held by the Trustee on the terms herein contained;
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(c) the Corporation will be entitled to exercise, and will exercise to prevent any contravention of any provision of this Indenture, all rights to vote from time to time until an Event of Default in respect of such Securities and the Trustee will from time to time upon request forthwith execute and deliver to the Corporation or to its nominee suitable authorizations that will remain in effect until revoked by the Trustee upon an Event of Default to enable the Corporation to exercise all such rights to vote and the Trustee will not vote such Securities;
(d) if an Event of Default occurs and all authorizations referred to in Section 4.02(c) have been revoked, the Trustee will have the right to vote in respect of such Securities and to retain any dividends or cash distributions in respect of the Securities while the default continues, but may pay the dividends or cash distributions over to the Corporation upon the default ceasing or being rectified;
(e) the Corporation must deliver to the Trustee consents to transfer the Securities, including certified copies of resolutions, as the Trustee and Counsel may require so that registration of the Securities in the name of the Trustee may be effected at any time as aforesaid and will cause fresh consents to transfer the Securities to the same effect to be delivered to the Trustee whenever the Trustee requires them;
(f) the Corporation will forward to the Trustee a copy of all communications received by it from any Person relating to Securities forthwith upon receipt thereof; and
(g) the Corporation hereby irrevocably authorizes the Trustee or any of its officers or any nominee of the Trustee as attorney with power of substitution, for and in the name of the Corporation, to sign and seal all documents and to fill in all blanks in signed powers of attorney and transfers necessary in order to complete the transfer of the Securities to the Trustee or to any one or more of its nominees or to the Debentureholders or to any of them or to any purchaser, as the case may be.
4.03 Reservation of Last Day of Leasehold Terms
It is hereby declared that the last day of any term reserved by any lease, oral or written, or any agreement therefor, now held or hereafter acquired by the Corporation, is hereby and will be excepted out of the Lien of this Indenture and does not and will not form any part of the Collateral, but the Corporation must stand possessed of the reversion remaining in the Corporation of any leasehold premises for the time being demised as aforesaid upon trust to assign and dispose thereof as any purchaser of such leasehold premises directs.
4.04 Dealing with Collateral by the Corporation
The Corporation must not sell, lease or otherwise dispose of any of the Collateral without the prior written consent of the Trustee, except that the Corporation may, until an Event of Default occurs, deal with its money and sell items of inventory in the ordinary course of its business so that the purchaser thereof takes title thereto free and clear of the security interest, assignment, mortgage, pledge and charge granted hereby but all proceeds of any such sale will continue to be subject to the security interest, assignment, mortgage, pledge and charge granted hereby and, upon the occurrence of an Event of Default, all money received by the Corporation will be received as trustee for the Debentureholders and must be held separate and apart from other money of the Corporation and must be paid over to the Trustee upon request.
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4.05 Effective Date of Security
The assignments, mortgages, pledges, charges and other security interests hereby created will be effective and will have effect from and after the date hereof whether or not the money hereby secured or any part thereof is advanced before or after or at the same time as the issue of any of the Debentures intended to be hereby secured or before or after or upon the date of the execution of this Indenture.
4.06 Defeasance
If the Corporation duly pays all money payable by the Corporation under and all obligations secured by the Debentures then the assignments, mortgages, pledges, charges and other security interests and charges hereby granted will cease and become null and void and the Collateral will revert to and revest in the Corporation without any release, reconveyance, re-entry or other act or formality whatsoever.
4.07 After Acquired Property and Further Assurances
(a) The Corporation must from time to time execute and do, or cause to be executed and done, all deeds, documents and things that, in the opinion of Counsel, are necessary or advisable to ensure that after acquired property of the nature described in Section 4.01 becomes subject to the fixed charges thereunder.
(b) The Corporation must, subject as herein provided, forthwith, and from time to time, execute and do, or cause to be executed and done, all deeds, documents and things that, in the opinion of Counsel, are necessary or advisable for giving the Trustee (so far as may be possible under the local laws of the places where the Collateral is situate) a valid fixed and floating charge of the nature herein specified upon any undertaking and assets, whether now owned or hereafter acquired, intended to be included in the Collateral and a valid transfer thereof for and to secure the payment of the principal, interest and any premium for the time being and from time to time owing under this Indenture and the Debentures and all other money intended to be secured by this Indenture, and for conferring upon the Trustee the power of sale and other powers over the Collateral as are hereby expressed to be conferred.
(c) Notwithstanding anything herein contained, the Trustee will not be bound to take any conveyance, assignment or transfer pursuant hereto of any asset that, in the opinion of the Trustee, is of an onerous character, but the Corporation must hold any such asset in trust for the Trustee.
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4.08 Registration
The Corporation must from time to time record, file, enter or register this Indenture, all indentures supplemental hereto, and all other instruments of further assurance without delay, wherever in the opinion of Counsel it is necessary or advisable to preserve and protect the Lien hereof and the rights of the Debentureholders and the Trustee hereunder for such action to be taken, in any land registry or land titles office against all real and immoveable property and rights referred to in Section 4.01 and under the provisions of all statutes providing for the registration of security interests in Canada, any province or territory of Canada and any other jurisdiction in which the Collateral is situated from time to time. The Corporation must renew such recordings, filings or registrations from time to time as and when required to keep them in full force and effect. The Corporation must from time to time, when requested to do so by the Trustee, furnish the Trustee with an opinion of Counsel that the provisions of this Section 4.08 have been complied with.
4.09 Attachment
The parties intend that the security interests hereby created in the Collateral will attach upon execution of this Indenture.
4.10 Expropriation
(a) If all or any part of the Collateral is taken by the exercise of any power of expropriation or under any other similar power exercisable by Governmental Authority (in this Section 4.10, an “expropriation”) and the compensation for the assets so expropriated (in this Section 4.10, the “compensation”) exceeds Cdn. $[●], the Corporation will forthwith pay such compensation to the Trustee to be held and invested in Authorized Investments.
(b) To the extent that the Corporation uses or proposes to use the compensation to purchase or enhance real property located in Canada, the compensation funds deposited with the Trustee may be withdrawn by the Corporation substantially in the same manner and subject to the same conditions as provided in Section 7.01(e) with respect to insurance proceeds.
(c) If the Corporation does not use all or any part of the funds deposited with the Trustee under Section 4.10(b), such funds will remain invested by the Trustee in Authorized Investments for the benefit of the Debentureholders, provided that the Corporation will be entitled, from time to time, to withdraw all or part of such funds upon receipt by the Trustee of a certificate of the Corporation describing real property purchased by the Corporation and subjected to the fixed charge hereunder after [●], 20[●] with funds of the Corporation from sources other than proceeds deposited with the Trustee under Sections 4.02, 4.10 or 7.01(e) and certifying that the value of such real property (as shown on the consolidated balance sheet of the Corporation after deducting the principal amount of any Debt secured by Liens thereon other than the Lien of this Indenture) exceeds the value of the funds being withdrawn when aggregated with all other funds previously withdrawn under Section 4.02, this Section 4.10(c) and Section 7.01(e).
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4.11 Funds Held by Trustee
All cash that may at any time be deposited with or held by the Trustee in accordance with the provisions of this Indenture will be held by the Trustee in the Province of Ontario and all Certificated Securities will be held by the Trustee in the Province of Ontario.
4.12 Power of Attorney for Québec Registrations
(a) The Trustee is hereby appointed and accepts its appointment as fonde de pouvoir (power of attorney) of the Debentureholders as contemplated by article 2692 of the Civil Code of Québec to enter into, to take and to hold, on behalf of and for the benefit of each of the Debentureholders, any hypothec granted to secure payment of and performance under the Debentures, and to exercise such powers and duties that are conferred upon the Trustee under any deed of hypothec or herein or under any other agreement. Any Person who becomes a Debentureholder will be deemed to have consented to and confirmed the Trustee as fonde de pouvoir and to have ratified as of the date such Person becomes a Debentureholder all actions taken by the fonde de pouvoir.
(b) The Trustee hereby appoints the Corporation and its duly authorized agents and their successors to be its attorney in the Province of Québec specifically for the purposes of doing only those things that the Corporation may lawfully do by attorney for the purpose of (a) discharging, releasing, reassigning, retroceding, waiving or subordinating any hypothec, security interest or other charge in respect of any of the accounts receivable forming part of the Collateral where full or partial payment of such account receivable is made to the Corporation in the ordinary course of business and such payment would entitle the obligor of such account receivable to the registration of a full or partial discharge pursuant to article 3065 of the Civil Code of Québec and (b) consenting to the discharge, release, reassignment, retrocession, waiver or subordination of any hypothec, security interest or other charge in respect of any accounts receivable not forming part of the Collateral including in the case of both (a) and (b) endorsing the Trustee’s name on any consents, filings, registrations or other documents in furtherance thereof.
4.13 Sub-attorney for Québec Discharges
The Trustee hereby authorizes the Corporation and its duly authorized agents to appoint any other person as sub- attorney and to delegate its powers pursuant to Section 4.12, provided that the Corporation is responsible for the acts and omissions of any of its duly authorized agents and their successors, agents and sub-attorneys who have been delegated powers under Section 4.12.
ARTICLE 5 -- REDEMPTION AND PURCHASE
5.01 Optional Redemption of Series A Debentures
The Series A Debentures will not be redeemable by the Corporation before [●]. The Corporation will have the right to redeem on and after [●], 20[●] and prior to the maturity of the Series A Debentures at any time the whole or from time to time any part of the principal amount of the Series A Debentures upon payment in lawful money of Canada of an amount equal to the higher of (a) the Canada Yield Price of the relevant Debenture and (b) the principal amount thereof, together in either case with unpaid interest accrued thereon.
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5.02 Places of Payment
The Redemption Price of Debentures called for redemption under any provision hereof will be payable upon presentment and surrender thereof (together with all unmatured coupons pertaining thereto) at any of the places where the principal of such Debentures is expressed to be payable or at any other place specified in the notice of redemption.
5.03 Partial Redemption
(a) If less than all the Debentures of any one series are to be redeemed at any one time, the Debentures to be redeemed will be selected by a method that complies with the requirements, if any, of any stock exchange on which the Debentures are listed and that the Trustee considers fair and appropriate or, in the absence of any such requirement, on a pro rata basis (to the nearest multiple of $1,000) based upon the principal amount of such Debentures registered in the name of each holder or in such other manner as the Trustee considers equitable.
(b) The holder of any Debenture to be redeemed in part only must, upon presentment of such Debenture and receipt of the money payable to such holder by reason of such redemption, surrender such Debenture to the paying agent for transmission to the Trustee and the Trustee must cancel the same and, without charge, forthwith certify and deliver to such holder a new Debenture or Debentures in an aggregate principal amount equal to the unredeemed part of the principal amount of the Debenture so surrendered.
(c) Unless the context otherwise requires, all provisions of this Indenture relating to the redemption of Debentures relate, in the case of Debentures redeemed or to be redeemed only in part, to the portion of the principal amount of such Debenture which has been or is to be redeemed.
5.04 Notice of Redemption
Notice of redemption must be given to the holders of the Debentures that are to be redeemed not more than 60 and not less than 30 days prior to the date fixed for redemption in the manner provided in Article 15. Every such notice must specify the aggregate principal amount of Debentures called for redemption, the date fixed for redemption, the Redemption Price and the places of payment and must state that interest upon the principal amount of Debentures called for redemption will cease to be payable from and after the Redemption Date. In addition, unless all the outstanding Debentures of a series are to be redeemed, the notice of redemption must also identify the Debentures that are to be redeemed and if any such Debenture is to be redeemed in part only, the principal amount of such part.
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5.05 Payment of Redemption Price
Upon notice being given in accordance with Section 5.04, the principal amount of the Debentures called for redemption will be due and payable at the Redemption Price, on the Redemption Date and with the same effect as if it were the date of maturity specified in such Debentures, anything therein or herein to the contrary notwithstanding. From and after such Redemption Date, interest upon the principal amount becoming due and payable will cease unless payment of the Redemption Price is not made on presentment for surrender of such Debenture (and all unmatured coupons, if any, pertaining thereto) at any of the places referred to in Section 5.02 on or after the Redemption Date and prior to the setting aside of the Redemption Price pursuant to Article 9.
5.06 Purchase of Debentures
The Corporation may at any time and from time to time purchase Debentures in the market (including purchase from or through an investment dealer or a firm holding membership on an recognized stock exchange) or by tender or by private contract at any price not exceeding the principal amount thereof at the date of purchase, together with unpaid interest accrued thereon to the date of purchase, costs of purchase and any premium that would have been payable had the Corporation redeemed the Debenture, other than through sinking fund operations, on the date of purchase.
5.07 Cancellation of Retired Debentures
Subject to the provisions of Section 5.03 as to Debentures redeemed in part, all Debentures purchased or redeemed in whole or in part under the provisions of this Article 5 must be forthwith delivered to and cancelled by the Trustee and no Debentures of the same series will be issued in substitution therefor.
Notwithstanding any other provision of this Indenture, payment of part of the principal amount of any Debenture may be made by the Corporation or the Trustee to the holder thereof without presentation or surrender thereof to the Trustee if the Corporation has filed with the Trustee a Certificate of the Corporation stating that the Corporation has entered into an agreement with such holder or the Person for which such holder is acting as nominee to the effect that payments will be so made and that such holder or other Person will not dispose of such Debenture or any interest therein without, prior to the delivery thereof, surrendering such Debenture to the Trustee or other registrar in exchange for a Debenture or Debentures aggregating the same principal amount as the principal amount of such Debenture so surrendered which remains unpaid.
5.08 Application to Subsequent Series
The provisions of Sections 5.02 to 5.07, inclusive, apply to the Series A Debentures and to the Debentures of any subsequent series that are by their terms redeemable, unless otherwise provided in the supplemental indentures establishing the terms of Debentures of such subsequent series.
ARTICLE 6 -- SINKING FUND PAYMENTS FOR SERIES A DEBENTURES
6.01 Mandatory Sinking Fund Payments for Series A Debentures
(a) The Corporation must establish a sinking fund for the benefit of the holders of Series A Debentures by paying to the Trustee on or before [●] in each of the years [●] to [●] inclusive a sum sufficient to redeem $[●] principal amount of Series A Debentures (a “Mandatory Sinking Fund Payment”) on [●] in such year (a “Sinking Fund Retirement Date”).
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(b) Not later than [●] in each of the years [●] to [●] inclusive, the Trustee must select for redemption in accordance with the provisions of Section 5.03 the largest aggregate principal amount of Series A Debentures that may be redeemed on the next Sinking Fund Retirement Date out of the total of the amount in the sinking fund on the date of selection plus the amount of the Mandatory Sinking Fund Payment to be made by the Corporation prior to the next Sinking Fund Retirement Date (as reduced by the application of any available sinking fund credit) and must notify the Corporation as to the Series A Debentures so selected. The Corporation, or the Trustee for and in the name of the Corporation, must call for redemption on such next Sinking Fund Retirement Date the Series A Debentures so selected. The provisions of Sections 5.02 to 5.05 and Section 5.07 apply mutatis mutandis to payments under this Section 6.01.
6.02 Credit for Non-Sinking Fund Redemptions
Series A Debentures redeemed by the Corporation pursuant to Section 5.01 or purchased by the Corporation for cancellation in accordance with the provisions of Section 5.06 constitute a credit equal to the principal amount thereof. Such credit will be applied to reduce the Mandatory Sinking Fund Payments falling due after the date of such redemption or purchase pro rata.
6.03 Sinking Fund Redemption Price
The amount of the Series A Debentures redeemed under this Article are redeemable at the principal amount thereof together with interest on such principal amount accrued and unpaid to the date specified for redemption, the whole constituting the “Sinking Fund Redemption Price”.
ARTICLE 7 -- COVENANTS OF THE CORPORATION
7.01 Positive Covenants
Except on the authority of an Extraordinary Resolution:
(a) Timely Payment. The Corporation must make due and timely payment of the principal of, any premium and accrued interest on every Debenture required to be paid by it hereunder or under any Debenture.
(b) Conduct of Business and Maintenance of Existence. The Corporation must, and must cause each of its Designed Subsidiaries to, carry on and conduct its business and operations in a proper, efficient and businesslike manner, in accordance with good business practice; except as provided in Article 10, maintain its existence; maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business; and comply with all its material licences and requirements of Applicable Law.
(c) Access to Information. The Corporation must, and must cause each of its Designated Subsidiaries to, permit the Trustee, during normal business hours and from time to time upon reasonable notice, to inspect any of its assets and to examine and take extracts from its financial books, accounts and records including but not limited to accounts and records stored in computer data banks and computer software systems, and to discuss its financial condition with its senior officers and (in the presence of such of its representatives as it may designate) its auditors, the reasonable expense of all of which will be paid by the Corporation.
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(d) Obligations and Taxes. The Corporation must, and must cause each of its Designated Subsidiaries to, pay or discharge, or cause to be paid or discharged, before they become delinquent (i) all Taxes imposed upon it or upon its income or profits or in respect of its business or assets (and file all tax returns in respect thereof), (ii) all lawful claims for labour, materials and supplies, (iii) all required payments under any of its Debt and (iv) all of its other obligations; provided, however, that it will not be required to pay or discharge or to cause to be paid or discharged any such amount so long as the validity or amount thereof is being contested in good faith by appropriate proceedings and a reserve in accordance with GAAP has been established on its books.
(e) Insurance.
(i) The Corporation must, and must cause each of its Designated Subsidiaries to, maintain insurance coverage by financially sound and reputable insurers with a financial strength rating of A or higher by A.M. Best (or the equivalent rating by another nationally recognized rating agency of similar standing) at the time of the issuance of any such policy and in such forms and amounts and against such risks as are customary for corporations of established reputation engaged in the same or a similar business and owning and operating similar assets; provided, however, that if, during the term of any such insurance policy, the rating accorded the insurer is less than A, the Corporation or such Designated Subsidiary will, on the date of renewal of any such policy, obtain such insurance policy from an insurer meeting the criteria described above.
(ii) If the proceeds of insurance on the Collateral with respect to a single occurrence exceed $[5,000,000], the Corporation must cause, and must ensure that each Designated Subsidiary causes, such proceeds to be made payable to the Trustee, to be held by the Trustee subject to the Lien hereof and to rights under Permitted Liens.
(iii) Insurance proceeds in respect of damage or destruction (but not business interruption insurance) must be held by the Trustee and invested by the Trustee in Authorized Investments.
(iv) The Trustee will pay all such proceeds received on account of any such damage or destruction to the Corporation or as it may direct from time to time as restoration, replacement or rebuilding (“Restoration”) progresses to pay (or reimburse the Corporation for) the cost of Restoration upon receipt by the Trustee of:
(A) a certificate of the Corporation describing the proposed Restoration and stating or estimating such cost and, if such cost or the proceeds of insurance in respect of such damage or destruction exceeds $[●], a certificate of an appraiser as to such cost and showing the computation thereof in reasonable detail;
(B) such evidence as the Trustee may reasonably require in support of such statement or estimate of costs;
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(C) a certificate of the Corporation (and of any appraiser who gave a certificate under Section 7.01(e)(iv)(A)) establishing either (I) that the funds retained by the Trustee, after the withdrawal being applied for (the “Proposed Withdrawal”), with other funds expended by the Corporation not subject to this Indenture, are adequate for the completion of the proposed Restoration in a functional, useful and efficient form for its intended use and that the aggregate of the amounts previously withdrawn pursuant to this Section 7.01(e)(iv)(C) in connection with such Restoration and the amount of the Proposed Withdrawal do not exceed the cost to the Corporation of the Restoration to the extent then completed less any amounts that the Corporation is required by any statute or regulation to retain or hold back in respect of such Restoration; or (II) that the proposed Restoration has been completed in such form at least for the period required by statute or regulation for expiration of construction lien rights against the asset restored, replaced or rebuilt, as the case may be; and
(D) if required by the Trustee, an opinion of Counsel that the asset restored, replaced or rebuilt, as the case may be, is subject to the fixed charge hereunder.
(v) If the Corporation does not use all of the proceeds deposited with the Trustee under Section 7.01(e)(ii), the remaining proceeds must remain invested by the Trustee in Authorized Investments for the benefit of the Debentureholders.
(f) Notice of Event of Default. The Corporation must promptly notify the Trustee of any Event of Default of which it becomes aware, using reasonable diligence, or event which with the passing of time or giving of notice or both would constitute an Event of Default.
(g) Environmental Compliance. The Corporation must, and must cause each of its Designated Subsidiaries to, operate all assets owned, leased or otherwise used by it such that no obligation including a clean-up or remedial obligation arises under any Requirements of Environmental Law; provided, however, that if any such claim is made or any such obligation arises, the Corporation or Designated Subsidiary, as the case may be, must immediately satisfy or contest such claim or obligation at its own cost and expense. It must promptly notify the Trustee upon (i) learning of the existence of hazardous materials located on, above or below the surface of any land which it occupies or controls (except those being stored, used or otherwise handled in substantial compliance with the requirements of Applicable Law), or contained in the soil or water constituting such land and (ii) the occurrence of any reportable release, spill, leak, emission, discharge, leaching, dumping or disposal of hazardous materials that has occurred on or from such land which, as to either (i) or (ii), could materially adversely affect its ability to perform its obligations hereunder or under any Debenture.
(h) Collateral. With respect to the Collateral, the Corporation must:
(i) provide to the Trustee the security required from time to time pursuant to Article 4 in accordance with the provisions thereof, accompanied by supporting resolutions, certificates and opinions in form and substance satisfactory to the Trustee, acting reasonably; and
(ii) do, execute and deliver all such things, documents, security agreements and assurances as may from time to time be requested by the Trustee, acting reasonably, to ensure that the Trustee holds at all times valid, enforceable, perfected first priority Liens (subject only to Permitted Liens) from the Corporation meeting the requirements of Article 4.
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(i) Maintenance of Assets. The Corporation must, and must cause each of its Designated Subsidiaries to, keep all assets that are necessary for its business in good working order and condition, normal wear and tear excepted.
(j) Information and Records. The Corporation must, and must cause each of its Designated Subsidiaries to, maintain a system of accounting that is established and administered in accordance with GAAP, keep adequate and proper books and records of account in accordance with GAAP and, in all material respects, keep accurate and complete records of any assets in which it has an interest.
(k) Guarantee Agreements. The Corporation must cause each Designated Subsidiary to enter into a guarantee agreement substantially in the form set out in Schedule 7.01(k).
(l) Guarantee Security. The Corporation must cause each Designated Subsidiary to execute and deliver to the Trustee (i) a floating charge debenture substantially in the form set out in Schedule 7.01(l)A, (ii) a debenture pledge agreement substantially in the form set out in Schedule 7.01(l)B and (iii) if there are shares to be pledged, a share pledge agreement substantially in the form set out in Schedule 7.01(l)C (collectively, the “Guarantee Security”).
7.02 Reporting Requirements
Except on the authority of an Extraordinary Resolution, the Corporation must furnish to the Trustee:
(a) Annual Financials. as soon as available, and in any event within 120 days after the end of each Financial Year, a copy of the audited annual consolidated financial statements (including a balance sheet and statements of profit and loss and source and application of funds) of the Corporation and its Subsidiaries and of the Corporation and its Designated Subsidiaries, for such Financial Year, together with the notes thereto, all prepared in accordance with GAAP and reported upon by the Corporation’s Auditors without qualifications;
(b) Quarterly Financials. as soon as available, and in any event within 60 days after the end of each of the first, second and third Financial Quarters, a copy of the unaudited quarterly consolidated financial statements (including a balance sheet and statements of profit and loss and source and application of funds) of the Corporation and its Subsidiaries and of the Corporation and its Designated Subsidiaries, for such period, all prepared in accordance with GAAP;
(c) Officer’s Certificate. together with each delivery of the financial statements referred to in Sections 7.02(a) and (b), a Compliance Certificate; and
(d) Annual Compliance Certificate. as soon as available, and in any event within 60 days after the end of each Financial Year, a certificate that the Corporation and each Designated Subsidiary is in compliance with the provisions of any security created hereby.
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7.03 Negative Covenants
Except on the authority of an Extraordinary Resolution, the Corporation must not, and must ensure that each of its Designated Subsidiaries does not:
(a) Disposition of Collateral. dispose of, in one transaction or a series of transactions, all or any part of the Collateral, whether now owned or hereafter acquired, except that it may dispose of, in the normal course of its business, for fair market value, in accordance with customary trade terms, any tangible personal property that would reasonably be considered to be the subject matter of sales by it in the normal course of its business for the purpose of carrying on the same, or that is worn out, obsolete or no longer useful for the purpose of carrying on its business;
(b) No Change of Name. change its name without providing the Trustee with prior written notice thereof;
(c) No Debt. create, incur, assume or permit to remain outstanding any Debt other than Permitted Debt;
(d) No Investments. make, directly or indirectly, any Investment, other than a Permitted Investment;
(e) No Distributions. make any Distribution, other than a Permitted Distribution;
(f) No Liens. create, incur, assume or permit to exist any Lien upon any of its assets, other than a Permitted Lien;
(g) Acquisitions. make any Acquisition, other than a Permitted Acquisition;
(h) No Change to Financial Year. make any change to its Financial Year which is, in respect of the Corporation currently December 31, and in respect of each Designated Subsidiary currently [December 31];
(i) No Continuance. continue into any other jurisdiction; or
(j) No Change to Business. carry on any business other than as currently carried on as of the date hereof.
7.04 Financial Covenants
Except on the authority of an Extraordinary Resolution, the Corporation must ensure that:
(a) Senior Debt to EBITDA Ratio. the Senior Debt to EBITDA Ratio is at all times (i) during the period commencing on the date of this Agreement up to [●], 20[●], not greater than [●]:1; and (ii) during the period commencing [●], 20[●] and thereafter, not greater than [●]:1, as at the end of each Financial Quarter, using the most recent 12 month financial results including the financial results for the Financial Quarter for which the calculation is to be made;
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(b) Fixed Charge Coverage Ratio. the Fixed Charge Coverage Ratio is at all times (i) during the period commencing on [●], 20[●] and ending on [●], 20[●], not less than [●]:1; and (ii) during the period commencing on [●], 20[●] and thereafter, not less than [●]:1, as at the end of each Financial Quarter using the most recent 12 month financial results including the financial results for the Financial Quarter for which the calculation is to be made;
(c) Current Assets to Current Liabilities Ratio. the Corporation’s Current Assets to Current Liabilities Ratio is at all times not less than [●]:1;
(d) Debt to Tangible Net Worth Ratio. the Debt to Tangible Net Worth Ratio is at all times not greater than [●]:1, as at the end of each Financial Quarter, using the most recent 12-month financial results including the financial results for the Financial Quarter for which the calculation is to be made; and
(e) Tangible Net Worth. the Corporation’s Tangible Net Worth is at all times not less than $[●].
7.05 Trustee’s Remuneration and Expenses
The Corporation will pay to the Trustee from time to time reasonable remuneration for its services hereunder and will pay or reimburse the Trustee, upon its request, for all reasonable expenses, disbursements and advances incurred or made by the Trustee in the administration or execution of the trusts created hereby (including the reasonable fees and disbursements of its counsel and all other advisers and assistants not regularly in its employ), both before and after any default hereunder until all duties of the Trustee under such trusts are finally and fully performed, except any such expense, disbursement or advance that arises from the negligence or bad faith of the Trustee. Any amount due under this Section 7.05 and unpaid 10 Business Days after request for such payment will bear interest from the expiration of such 10 Business Days at a rate per annum equal to the then current rate reasonably charged by the Trustee from time to time, payable on demand. After default, all amounts so payable and the interest thereon will be payable out of any funds coming into the possession of the Trustee in priority to the principal of and any premium and interest on the Debentures.
7.06 Not to Accumulate Interest
The Corporation must not, except on the authority of an Extraordinary Resolution, directly or indirectly, extend or assent to the extension of time for payment of any interest payable hereunder or be a party to or approve any such arrangement by purchasing or funding any interest or in any other manner. If the time for payment of any such interest is so extended, whether for a definite period or otherwise, and there is a default hereunder such interest will not be entitled to the benefit of the security granted hereunder except subject to the prior payment in full of the principal of all Debentures and of all interest on Debentures, the payment of which has not been so extended, and of all other money payable hereunder.
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7.07 Payment of Additional Amounts
The Corporation must pay to any Debentureholder who is not a resident of Canada for purposes of the Income Tax Act (Canada), such additional amounts (“Additional Amounts”) as may be necessary in order that every net payment of principal of, any premium and interest on such Debenture, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed by Canada or any political subdivision or taxing authority thereof or therein, upon or as a result of such payment, will not be less than the amount provided for in such Debenture to be then due and payable; provided, however, that the foregoing will not apply to any tax, assessment or other governmental charge that is required to be deducted or withheld by reason of (i) such holder carrying on a business in Canada for purposes of the Income Tax Act (Canada) (except to the extent that the purchase or holding (other than in Canada) of any of the Debentures may at any time be deemed to constitute the carrying on of business in Canada) or (ii) such holder using or having used the Debenture in carrying on a business in Canada for purposes of the Income Tax Act (Canada).
7.08 Principal, Interest, Etc. to Include Additional Amounts
References in this Indenture to payments of principal of, any premium and interest on the Debentures will be deemed to include any Additional Amounts that may be payable hereunder.
7.09 Performance of Covenants by Trustee
If the Corporation fails to perform any of its covenants contained in this Indenture, the Trustee may itself perform any of such covenants capable of being performed by it, but will be under no obligation to do so. All sums expended or advanced by the Trustee for such purpose will be repayable as provided in Section 7.05. No such performance or advance by the Trustee will relieve the Corporation of any default hereunder.
ARTICLE 8 -- DEFAULT AND ENFORCEMENT
8.01 Events of Default
The occurrence of any one or more of the following events (each such event being herein referred to as an “Event of Default”) will constitute a default under this Indenture:
(a) the Corporation does not pay the principal of or any premium on any Debenture when due under any provision hereof or of such Debenture;
(b) the Corporation does not pay any interest due on any Debenture and such default continues for a period of [●] days after notice of such default has been given by the Trustee to the Corporation;
(c) the Corporation does not observe or perform any covenant or obligation contained in Article 10;
(d) the Corporation does not observe or perform any covenant or obligation of the Corporation contained in this Indenture (other than a covenant or condition the breach or default in performance of which is specifically dealt with elsewhere in this Section 8.01) and such default is not remedied within [●] days after notice has been given by the Trustee to the Corporation specifying such default;
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(e) any representation or warranty made by the Corporation herein or in any document or certificate provided at any time to the Trustee in connection herewith is incorrect or misleading in any material respect on and as of the date thereof and such default is not remedied within [●] days after notice has been given by the Trustee to the Corporation specifying such default;
(f) an event of default as defined in any indenture or instrument evidencing, or under which, any indebtedness for borrowed money of the Corporation or any Designated Subsidiary is outstanding occurs and is continuing, and such indebtedness has been accelerated so that not less than $[●] of the same will be or have become due and payable prior to the date on which the same would otherwise become due and payable and such acceleration is not stayed, rescinded or annulled within 10 days after written notice thereof has been given to the Trustee by the Corporation or to the Corporation by the Trustee (which notice may be given by the Trustee, in its discretion, and must be given by the Trustee upon receipt of a Debentureholders’ Request) or if the Corporation fails, within 10 days after the maturity or extended maturity of any such indebtedness or acceleration, to pay or refund the same; provided, however, that if such event of default under such indenture or instrument is remedied or cured by the Corporation or is waived by the holders of such indebtedness before any judgment or decree for the payment of the money due has been obtained or entered, then the Event of Default hereunder by reason thereof will be deemed likewise to have been thereupon remedied, cured or waived without further action upon the part of the Trustee or the Debentureholders;
(g) the Corporation ceases or threatens to cease to carry on the business currently being carried on by it or a substantial portion thereof or makes or agrees to make an assignment, disposition or conveyance, whether by way of sale or otherwise, of all or a substantial part of its assets or proceedings are commenced for the winding-up, liquidation or dissolution of the Corporation;
(h) the Corporation or any Designated Subsidiary generally does not pay its debts as they become due, or admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of creditors; or any proceeding is instituted by or against the Corporation or any Designated Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding-up, reorganization, arrangement, adjustment, administration, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, administrator, liquidator, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding remains undismissed or unstayed for a period of [60] days or any of the actions sought in such proceeding (including the entry of an order for relief against it or the appointment of a receiver, trustee, administrator, liquidator, custodian or other similar official for it or for any substantial party of its property) occurs, or the Corporation or any Designated Subsidiary takes any corporate action to authorize any of the actions set forth above in this Section 8.01(h);
(i) the Collateral or any part thereof is seized or otherwise attached by anyone pursuant to any legal process or other means, including distress, execution or any other step or proceeding with similar effect, and the same is not released, bonded, satisfied, discharged or vacated within the shorter of a period of 15 days and 10 days less than such period as would permit such assets or any part thereof to be sold pursuant thereto;
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(j) a final judgment or decree for the payment of money due has been obtained or entered against the Corporation or any Designated Subsidiary in an amount that could reasonably be expected to materially and adversely affect the ability of the Corporation to fulfil its obligations to the Debentureholders under this Indenture or any Debenture and such judgment or decree has not been and remain vacated, discharged or stayed pending appeal within the applicable appeal period; or
(k) the obligations of the Corporation in this Indenture or under the Debentures cease to constitute legal, valid and binding obligations of the Corporation or if the Lien hereof ceases to be a valid and perfected first priority security interest as against third parties and such default is not remedied within [●] days after notice has been given by the Trustee to the Corporation specifying such default.
8.02 Acceleration on Default
Subject to the provisions of Section 8.03, if an Event of Default has occurred and is continuing, the Trustee may, in its discretion, and must, upon receipt of a Debentureholders’ Request, declare the principal of and interest on the Debentures and all other money payable hereunder to be due and payable on demand. The Corporation must on such demand forthwith pay to the Trustee for the benefit of the Debentureholders the principal of and unpaid interest accrued on, and interest on amounts in default under, the Debentures and all other money payable hereunder together with subsequent interest thereon at the rate borne by the Debentures from the date of such declaration until payment is received by the Trustee. Such money payable hereunder will include any redemption premium which would have been payable upon the redemption of the Debentures on the date of such declaration. Such payment when made will be deemed to have been made in discharge of the Corporation’s obligations hereunder and any money so received by the Trustee must be applied as herein provided.
If an Event of Default occurs and is continuing, the Trustee must, within 30 days after it becomes aware of the occurrence of such Event of Default, give notice of such Event of Default to the Debentureholders in the manner provided in Section 15.01, provided that, notwithstanding the foregoing, the Trustee will not be required to give such notice if the Trustee in good faith decides that the withholding of such notice is in the best interests of the Debentureholders and so advises the Corporation in writing.
8.03 Waiver of Default
If an Event of Default has occurred otherwise than by default in payment of any principal money at maturity
(a) the Trustee, so long as it has not become bound to act pursuant to a Debentureholders’ Request given as provided in Section 8.02, has the power to waive the Event of Default if, in the Trustee’s opinion, the Event of Default has been cured or adequate satisfaction made therefor and, in such event, to annul any declaration made by the Trustee in the exercise of its discretion, upon such terms and conditions as to the Trustee may deem advisable and
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(b) the holders of more than 66 2/3% of the principal amount of the Debentures will have the power (in addition to and subject to the powers exercisable by Extraordinary Resolution) by requisition in writing to instruct the Trustee to waive the Event of Default or to annul any declaration made by the Trustee pursuant to Section 8.02 or both and the Trustee must thereupon waive the Event of Default or annul such declaration or both, upon such terms and conditions as such Debentureholders prescribe, provided that no act or omission either of the Trustee or of the Debentureholders will extend to or be taken in any manner whatsoever to affect any subsequent Event of Default or the rights resulting therefrom.
8.04 Remedies in Case of Default
(a) Subject to the provisions of Section 8.03 and to the provisions of any Extraordinary Resolution, if an Event of Default has occurred and is continuing, any or all of the security granted hereby will become immediately enforceable and, in addition to any rights or remedies provided by Applicable Law, the Trustee may, in its discretion, and must upon receipt of a Debentureholders’ Request and upon being indemnified to its reasonable satisfaction against all costs, expenses and liabilities to be incurred, exercise one or more of the following powers:
(i) the Trustee may by appointment in writing appoint a receiver or receiver and manager (each herein referred to as “Receiver”) of the Collateral (which term when used in this Section 8.04 will include the whole or any part of the Collateral) and may remove or replace such Receiver from time to time or may institute proceedings in any court of competent jurisdiction for the appointment of a Receiver of the Collateral; and the term “Trustee” when used in this Section 8.04 includes any Receiver so appointed and the agents, officers and employees of such Receiver; and the Trustee will not be in any way responsible for any misconduct or negligence of any such Receiver who will be deemed, so far as concerns the responsibility for its acts or omissions, the agent or attorney of the Corporation and not of the Trustee or the Debentureholders;
(ii) the Trustee may take possession of the Collateral and require the Corporation to assemble the Collateral and deliver or make the Collateral available to the Trustee at such place or places as may be specified by the Trustee;
(iii) the Trustee may take such steps as it considers desirable to maintain, preserve or protect the Collateral;
(iv) the Trustee may carry on or concur in the carrying on of all or any part of the business of the Corporation;
(v) the Trustee may enforce any rights of the Corporation in respect of the Collateral in any manner permitted by Applicable Law;
(vi) the Trustee may sell, lease or otherwise dispose of any Collateral at public auction, by private tender, by private sale or otherwise either for cash or upon credit upon such terms and conditions as the Trustee may determine and without notice to the Corporation unless required by Applicable Law;
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(vii) the Trustee may accept the Collateral in satisfaction of the obligations of the Corporation hereunder and under the Debentures upon notice to the Corporation of its intention to do so in the manner required by Applicable Law;
(viii) the Trustee may, for any purpose specified herein, borrow money on the security of the Collateral in priority to the Lien of this Indenture;
(ix) the Trustee may enter upon, occupy and use all or any of the premises, buildings and plant occupied by the Corporation and use all or any of the equipment and other assets of the Corporation for such time as the Trustee requires to facilitate the realization of the Collateral, free of charge, and the Trustee will not be liable to the Corporation for any neglect in so doing or in respect of any rent, charges, depreciation or damages in connection with such actions;
(x) the Trustee may charge on its own behalf and pay to others all reasonable amounts for expenses incurred and for services rendered in connection with the exercise of the rights and remedies of the Trustee hereunder including reasonable legal, Receiver and accounting fees and expenses and any costs of complying with any environmental order, and in every such case the amounts so paid together with all costs, charges and expenses incurred in connection therewith, including interest thereon at such rate as the Trustee deems reasonable, will be added to and form part of the obligations hereby secured; and
(xi) the Trustee may discharge any Lien that may exist or be threatened against the Collateral, and in every such case the amounts so paid together with costs, charges and expenses incurred in connection therewith will be added to the obligations hereby secured.
On any entry or taking of possession, directly or indirectly, as herein provided by the Trustee, the Trustee will have all the powers of a receiver and a receiver and manager and in any judicial proceeding relative to the Corporation, its assets or its creditors the Trustee will be authorized to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Trustee and of the Debentureholders allowed in such judicial proceeding.
(b) The Trustee may (a) grant extensions of time, (b) take and perfect or abstain from taking and perfecting security, (c) give up securities, (d) accept compositions or compromises, (e) grant releases and discharges and (f) release any part of the Collateral or otherwise deal with the Corporation, debtors of the Corporation, sureties and others and with the Collateral and other security as the Trustee sees fit without prejudice to the liability of the Corporation to the Trustee or the Trustee’s rights hereunder.
(c) The Trustee will not be liable or responsible for any failure to seize, collect, realize, or obtain payment with respect to the Collateral and is not bound to institute proceedings or to take other steps for the purpose of seizing, collecting, realizing or obtaining possession or payment with respect to the Collateral or for the purpose of preserving any rights of the Trustee, the Corporation or any other Person in respect of the Collateral.
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(d) The Trustee may apply any proceeds of realization of the Collateral to payment of expenses in connection with the preservation and realization of the Collateral as above described and the Trustee may apply any balance of such proceeds to payment of the obligations in such order as the Trustee sees fit. If there is any surplus remaining, the Trustee may pay the surplus to any Person having a claim thereto in priority to the Corporation of whom the Trustee has knowledge and any balance remaining must be paid to the Corporation. If the disposition of the Collateral fails to satisfy the obligations secured by this Indenture and the aforesaid expenses, the Corporation will be liable to pay any deficiency to the Trustee forthwith on demand.
(e) The Trustee, any receiver, any receiver and manager or any one or more of the Debentureholders or any agent or representative thereof may become purchasers at any sale or other realization of the Collateral, or any part thereof, whether made under the power of sale herein contained or pursuant to judicial proceedings.
(f) The Corporation must yield up possession of the Collateral to the Trustee on demand whenever the Trustee has a right of entry under the foregoing provisions and must put no obstacle in the way of, but must facilitate by all legal means, the actions of the Trustee hereunder and must not interfere with the carrying out of the powers hereby granted to the Trustee, and upon the occurrence of an Event of Default the Corporation will and hereby does consent to the appointment of a liquidator or receiver or receiver and manager with all or any such powers as the Trustee is hereby vested with, if so required by the Trustee. Upon the occurrence of an Event of Default, the Corporation will and hereby does consent to any petition or application presented to the court by the Trustee in order to effectuate the intent of this Indenture. The Corporation will not, after receiving due notice from the Trustee that it has taken possession of the Collateral by virtue hereof, continue in possession of the Collateral unless with the express written consent and authority of the Trustee, and must forthwith execute such documents and transfers as may be necessary to place the Trustee in legal possession of the Collateral. After receipt of such notice, all the powers, functions, rights and privileges of each director and officer of the Corporation will cease and terminate with respect to the Collateral, unless specifically continued in writing by the Trustee, or unless the Collateral has been restored to the Corporation as hereinbefore provided.
(g) All rights of action hereunder may be enforced by the Trustee without the possession of any of the Debentures or the production thereof on the trial or other proceedings relative thereto.
(h) No course of dealing on the part of the Trustee or any Debentureholder nor any delay or failure of the Trustee or of the Debentureholders to exercise any remedy referred to in Section 8.04(a) will operate as a waiver of any such remedy or will be construed to be a waiver of any Event of Default hereunder or acquiescence therein or will otherwise prejudice any rights, powers or remedies of the Trustee or such holders.
(i) Unless and until it is required so to do under the terms hereof, the Trustee is not bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby; nor is the Trustee required to take notice of an Event of Default or any default hereunder, other than in payment of any money required by any provision hereof to be paid to it, unless and until such time as the Trustee has actual knowledge of, or has received notice of, such Event of Default or any default hereunder and in the absence of actual knowledge or any such notice and subject as aforesaid, the Trustee may assume that the Corporation is not in default hereunder.
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(j) In the exercise of any remedy herein contained the Trustee will in no event be obliged to marshall the security hereby constituted in favour of any other creditor of the Corporation or any Designated Subsidiary, and the Corporation waives any right that it may have to require the Trustee to so marshall security. The Corporation further renounces all benefits of discussion and division.
(k) Whenever the Trustee determines under the provisions of Section 8.04(a)(i) to appoint a Receiver, the following provisions will apply:
(i) such appointment will be made by the duly authorized officers of the Trustee, and a copy of the authorizing instrument and of such appointment, certified by an officer of the Trustee under its corporate seal, will be evidence for all purposes of such appointment. The Trustee may from time to time in the same manner remove any Receiver so appointed and appoint another in its stead. In making any such appointment, the Trustee will be deemed to be acting as the attorney of the Corporation;
(ii) any such appointment may be limited to any part or parts of the Collateral, or may extend to the whole thereof;
(iii) every such Receiver may in the discretion of the Trustee be vested with all or any of the powers and discretions of the Trustee;
(iv) the Trustee may from time to time fix the remuneration of every such Receiver and direct the payment thereof out of the Collateral, the income therefrom or the proceeds thereof;
(v) the Trustee may from time to time require any such Receiver to give security for the performance of its duties and may fix the nature and amount thereof, but will not be bound to require such security;
(vi) every such Receiver may, with the consent in writing of the Trustee, borrow money for the purposes of carrying on the business of the Corporation or for the maintenance, protection or preservation of the Collateral or any part thereof, and the Receiver may issue certificates (herein called “receiver’s certificates”) for such money as will, in the opinion of the Trustee, be sufficient for obtaining upon the security of the Collateral or any part thereof the amounts from time to time required, and such receiver’s certificates may be payable either to order or to bearer and may be payable at such time or times as to the Trustee may appear expedient, and will bear interest as may therein be declared, and the Receiver may sell, pledge or otherwise dispose of the same in such manner as to the Trustee may seem advisable, and may pay such commission on the sale thereof as to the Trustee may appear reasonable, and the amounts from time to time payable by virtue of such receiver’s certificates will form a charge upon the Collateral in priority to the security granted to the Debentureholders hereunder;
(vii) every such Receiver will, so far as concerns responsibility for its acts or omissions, be deemed the agent of the Corporation, and in no event the agent of the Trustee or the Debentureholders, and the Trustee will not, in making or consenting to such appointment, incur any liability to the Receiver for its remuneration or otherwise howsoever;
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(viii) except as may be otherwise directed by the Trustee, all money from time to time received by such Receiver will be paid over to the Trustee to be held by it on the trusts of this Indenture; and
(ix) the Trustee may pay over to such Receiver any money constituting part of the Collateral with the intent that the same may be applied for the purposes hereof by such Receiver, and the Trustee may from time to time determine what funds the Receiver will be at liberty to keep in hand with a view to the performance of its duty as such Receiver.
8.05 Suits by Debentureholders
No Debentureholder has the right to institute any action or proceeding or to exercise any other remedy authorized by this Indenture for the purpose of enforcing any right on behalf of the Debentureholders or for the execution of any trust or power hereunder or for the appointment of a liquidator or receiver or receiver and manager or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Corporation wound up or to file or prove a claim in any liquidation or bankruptcy proceedings, unless a Debentureholders’ Request for the Trustee to institute such action or proceeding and indemnity referred to in Section 8.04 have been tendered to the Trustee, the Trustee has not received instructions inconsistent with such Debentureholders’ Request from the holders of more than 66 2/3% in principal amount of the Debentures outstanding within the 60 day period following the receipt of such Debentureholders’ Request and the Trustee has failed to act within a reasonable time thereafter. If the Trustee has so failed to act, but not otherwise, any Debentureholder acting on behalf of all Debentureholders will be entitled to take any of the proceedings that the Trustee might have taken hereunder. No Debentureholder has any right in any manner whatsoever to effect, disturb or prejudice the rights hereby created by its action or to enforce any right hereunder or under any Debenture, except subject to the conditions and in the manner herein provided and for the equal and rateable benefit of all Debentureholders of the affected series. Any money received as a result of a proceeding taken by any Debentureholder hereunder must be forthwith paid to the Trustee.
8.06 Application of Money Received by Trustee
Except as herein otherwise provided, the money arising from any enforcement of the provisions hereof must be held by the Trustee and forthwith applied, together with any other money in the hands of the Trustee available for the purpose, as follows:
(a) first, to pay or reimburse to the Trustee and the Debentureholders the remuneration, expenses, disbursements and advances of the Trustee earned, incurred or made in the administration or execution of the trusts hereunder or otherwise in relation to this Indenture, with interest thereon as herein provided;
(b) second, to pay interest on any overdue interest on such Debentures and thereafter pay the accrued and unpaid interest on such Debentures and interest on any other money owing under the provisions of this Indenture and thereafter to pay the principal of and any redemption premium of such Debentures (or if the Debentureholders by Extraordinary Resolution have directed payments to be made in accordance with any other order of priority, or without priority as between principal and interest, then such money will be applied in accordance with such direction); and
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(c) third, to pay the surplus, if any, of such money to the Corporation or its assigns;
provided, however, that no payment will be made pursuant to Section 8.06(b) in respect of any Debenture held, directly or indirectly, by or for the benefit of the Corporation or any of its Affiliates (other than any Debenture pledged for value and in good faith to a Person other than the Corporation or any of its Affiliates, but only to the extent of such Person’s interest therein) except after the prior payment in full of all amounts owing under the provisions of this Indenture and the Debentures which are not so held.
8.07 Distribution of Proceeds
Payments to Debentureholders pursuant to Section 8.06(b) must be made as follows:
(a) at least 15 days’ notice of every such payment must be given in the manner provided in Article 15 specifying the time when and the place or places where the Debentures are to be presented and the amount of the payment and the application thereof as between principal, any premium and interest;
(b) payment will be made upon presentment of a Debenture at any one of the places specified in such notice and any such Debenture thereby paid in full must be surrendered, or, if partially paid, a memorandum of such payment must be endorsed thereon (although the Trustee may in its discretion dispense with presentment and surrender or endorsement in any special case upon such indemnity being given as the Trustee deems sufficient);
(c) from and after the date of payment specified in the notice, interest will accrue only on the amount owing on each Debenture after giving credit for the amount of the payment specified in such notice unless a Debenture is duly presented on or after the date so specified and payment of such amount is not made; and
(d) the Trustee is not required to make any interim payment to Debentureholders unless, after reserving therefrom such amount as the Trustee may think necessary to provide for the payments mentioned in Section 8.06(a), the money available to it exceeds 5% of the principal amount of the outstanding Debentures.
ARTICLE 9 -- SATISFACTION AND DISCHARGE
9.01 Cancellation and Destruction
All matured Debentures and coupons must, forthwith after payment, be cancelled and delivered to the Trustee. All Debentures and coupons cancelled or required to be cancelled under this or any other provision of this Indenture may, subject to Applicable Law, be destroyed by or under the direction of the Trustee (in the presence of a representative of the Corporation, if the Corporation requires) and the Trustee must prepare and retain a certificate of such destruction and deliver a duplicate thereof to the Corporation.
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9.02 Non-Presentment of Debentures or Coupons
If the holder of any Debenture or coupon fails to present the same for payment on the date on which, in the case of a Debenture, the principal thereof, any premium thereon or the interest thereon becomes payable either at maturity or on redemption or, in the case of a coupon, it becomes payable, the Corporation is entitled
(a) to make such payment to the Trustee and direct it to set the same aside or
(b) in respect of money in the hands of the Trustee that may or should be applied to the payment of the Debentures or coupons, to direct the Trustee to set the same aside,
in trust to be paid to the holder of such Debenture or coupon upon due presentment and surrender thereof in accordance with the provisions of this Indenture; and thereupon the principal money, any redemption premium or the interest payable on or represented by each Debenture and each coupon in respect of which such money has been set aside will be deemed to have been paid and the holder thereof will thereafter have no right in respect thereof except to receive payment of the money so set aside by the Trustee (without interest on such money) upon due presentment and surrender thereof, subject always to the provisions of Section 9.03.
9.03 Repayment of Unclaimed Money to Corporation
Any money set aside under Section 9.02 in respect of any Debenture or coupon and not claimed by and paid to the holder of such Debenture or coupon, as provided in Section 9.02, within six years after the date of such setting aside, must be repaid to the Corporation by the Trustee on demand, and thereupon the Trustee will be released from all further liability with respect to such money, and thereafter such holder will have no rights in respect of such Debenture or coupon except to obtain payment of such money (without interest thereon) from the Corporation, subject to any applicable period of prescription provided hereunder or by Applicable Law.
9.04 Release from Covenants and Discharge
Upon proof being given to the reasonable satisfaction of the Trustee that the principal of all Debentures and any premium and interest (including interest on amounts in default, if any) thereon and other money payable hereunder have been paid or satisfied or that, all the Debentures having matured or having been duly called for redemption, or the Trustee having been given irrevocable instructions by the Corporation to publish within 90 days’ notice of redemption of all the Debentures, such payment or redemption has been provided for by payment to the Trustee or otherwise, and upon payment of all costs, charges and expenses properly incurred by the Trustee hereunder and all interest thereon and the remuneration of the Trustee, or upon provision satisfactory to the Trustee being made therefor, the Trustee must, at the request and expense of the Corporation, execute and deliver to the Corporation such deeds or other instruments as are necessary to release the Corporation from its covenants herein contained or contained in the Debentures, except those relating to the indemnification of the Trustee and to release and discharge this Indenture and the security created pursuant hereto.
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ARTICLE 10 -- SUCCESSOR CORPORATIONS
10.01 Certain Requirements in Respect of Merger, etc.
The Corporation will not enter into any transaction (whether by way of reorganization, reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or otherwise) whereby all or substantially all of its undertaking and assets would become the property of any other Person or, in the case of amalgamation, of the continuing corporation resulting therefrom unless:
(a) such other Person is a body corporate (herein called a “Successor Corporation”) incorporated under the laws of Canada or any province thereof;
(b) the Successor Corporation executes, prior to or contemporaneously with the consummation of such transaction, such instruments as are satisfactory to the Trustee and, in the opinion of Counsel, are necessary or advisable to evidence its agreement to observe and perform all the covenants and obligations of the Corporation under this Indenture;
(c) such transaction will, to the satisfaction of the Trustee and in the opinion of Counsel, be upon such terms as substantially to preserve and not to impair any of the rights and powers of the Trustee or of the Debentureholders hereunder; and
(d) no condition or event exists in respect of the Successor Corporation at the time of such transaction and after giving full effect thereto that would, with the lapse of time or the giving of notice or both, constitute an Event of Default.
10.02 Vesting of Powers in Successor
Whenever the conditions of Section 10.01 have been observed and performed, the Successor Corporation will succeed to and be substituted for the Corporation with the same effect as if the Successor Corporation had been named herein as the Corporation, and the Successor Corporation will possess and from time to time may exercise each and every right and power of the Corporation under this Indenture in the name of the Corporation or otherwise and any act or proceeding required by any provision of this Indenture to be done or performed by any director or officer of the Corporation may be done and performed with like force and effect by the like director or officer of the Successor Corporation.
ARTICLE 11 -- MEETINGS OF DEBENTUREHOLDERS
11.01 Right to Convene Meeting
The Trustee may at any time and from time to time and must, on receipt of a request of the Corporation or a Debentureholders’ Request and upon being indemnified to its reasonable satisfaction by the Corporation or by the Debentureholders signing such Debentureholders’ Request, as the case may be, against the costs that may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Debentureholders. If the Trustee fails, within 30 days after receipt of such request and indemnity, to give notice convening such meeting, the Corporation or such Debentureholders, as the case may be, may convene such meeting. Every such meeting will be held in the City of [●] or at such other place as may be approved or determined by the Trustee.
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11.02 Notice
At least 15 days’ notice of any meeting must be given to the Debentureholders in the manner provided in Article 15 and a copy thereof must be sent to the Trustee in the manner set out in Article 15 unless the meeting has been called by the Trustee and to the Corporation unless the meeting has been called by the Corporation. Such notice must state the time when and the place where the meeting is to be held and set out the general nature of the business to be transacted thereat. It is not necessary for any such notice to set out the terms of any resolution to be proposed or any of the provisions of this Article 11.
11.03 Chair
Some individual, who need not be a Debentureholder, nominated in writing by the Trustee, will chair the meeting. If no individual is so nominated, or if the individual so nominated is not present within 15 minutes after the time fixed for the holding of the meeting, the Debentureholders present in person or by proxy may choose some individual present to chair the meeting.
11.04 Quorum
Subject to the provisions of Section 11.12
(a) at any meeting of Debentureholders, a quorum will consist of Debentureholders present in person or by proxy and representing at least 25% of the principal amount of the outstanding Debentures and
(b) if a quorum of the Debentureholders is not present within 30 minutes after the time fixed for holding the meeting, such meeting, if convened by the Debentureholders or on a Debentureholders’ Request, must be dissolved. If otherwise convened, the meeting will be adjourned without notice to the same day in the next week (unless such day is not a Business Day in which case it will stand adjourned to the next following Business Day thereafter) at the same time and place, unless the chair of the meeting appoints some other place, day or time, of which not less than seven days’ notice must be given in the manner provided in Article 15. At the adjourned meeting, the Debentureholders present in Person or by proxy will constitute a quorum and may transact the business for which the meeting was originally convened notwithstanding that they may not represent 25% in principal amount of the outstanding Debentures.
11.05 Power to Adjourn
The chair of any meeting at which a quorum of the Debentureholders is present may, with the consent of the holders of a majority in principal amount of the Debentures represented thereat, adjourn any such meeting and no notice of such adjourned meeting need be given except such notice, if any, as the meeting so adjourned may prescribe.
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11.06 Show of Hands
Every question submitted to a meeting will be decided in the first place by a majority of the votes given on a show of hands except that votes on Extraordinary Resolutions must be given in the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chair of the meeting that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority will be conclusive evidence of the fact.
11.07 Poll
On every Extraordinary Resolution, and on any other question submitted to a meeting when demanded after a vote by show of hands by the chair of the meeting or by any Debentureholder acting in person or by proxy, a poll must be taken in such manner as the chair directs. Questions other than Extraordinary Resolutions will, if a poll is taken, be decided by the votes of the holders of a majority in principal amount of the Debentures represented at the meeting and voted on the poll.
11.08 Voting
On a show of hands, every Person who is present and entitled to vote, whether as a Debentureholder or as proxy for one or more absent Debentureholders or both, will have one vote. On a poll each Debentureholder present in Person or represented by a proxy duly appointed by an instrument in writing will be entitled to one vote in respect of each $[●] principal amount of Debentures of which it is then the holder. A proxy need not be a Debentureholder. In the case of joint registered holders of a Debenture, any one of them present in person or by proxy at the meeting may vote in the absence of the other or others; but if more than one of them is present in person or by proxy, they must vote together in respect of the Debentures of which they are joint registered holders.
11.09 Regulations
The Trustee, or the Corporation if its convenes the meeting, may from time to time make and vary such regulations as it thinks fit:
(a) providing for the form of the instrument of proxy and the manner in which the same is to be executed and the production of the authority of any Person signing on behalf of a Debentureholder;
(b) for the deposit of instruments appointing proxies at such place as the Trustee, the Corporation or the Debentureholders convening the meeting, as the case may be, may in the notice convening the meeting direct, and the time before the holding of the meeting, or adjourned meeting, when the same must be deposited; and
(c) enabling particulars of such instruments appointing proxies to be mailed, cabled or sent by any other electronic means of communication before the meeting to the Corporation or to the Trustee and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting.
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Any regulations so made will be binding and effective and the votes given in accordance therewith will be valid and counted. Except as otherwise provided in such regulations, the only Persons who will be recognized at any meeting as the holders of any Debentures, or as entitled to vote or be present at the meeting in respect thereof, will be the registered holders of Debentures and Persons duly appointed as proxy holders.
11.10 Corporation and Trustee may be Represented
The Corporation and the Trustee, by their respective officers and directors, and the legal advisers of the Corporation, the Trustee and the Debentureholders may attend any meeting of the Debentureholders, but will have no vote as such.
11.11 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by other provisions of this Indenture or Applicable Law, at a meeting of the Debentureholders (or of holders of a series of Debentures in respect of matters relating solely to that series), the Debentureholders have the following powers, exercisable from time to time by Extraordinary Resolution only:
(a) to assent to any modification of or change in or omission from or addition to the provisions contained herein that are agreed to by the Corporation and to authorize the Trustee to concur in and execute any deed or instrument supplemental hereto embodying such modification, change, omission or addition;
(b) to sanction any modification, abrogation, alteration, compromise or arrangement of the rights of the Debentureholders or the Trustee against the Corporation or against its undertaking and assets or any part thereof including any release and discharge of any security created pursuant hereto, whether such rights arise under this Indenture or the Debentures or otherwise;
(c) to direct or authorize the Trustee to exercise or refrain from exercising any power, right, remedy or authority given to it by this Indenture or the Debentures in any manner specified in such Extraordinary Resolution;
(d) to waive and direct the Trustee to waive any default on the part of the Corporation in complying with any provision of this Indenture or the Debentures and to annul and to direct the Trustee to annul any declaration made by the Trustee pursuant to Section 8.02, either unconditionally or upon any conditions specified in such Extraordinary Resolution;
(e) to restrain any Debentureholder from taking, instituting or maintaining any action or other proceeding for the payment of any amount owing hereunder or for the execution of any trust or power hereunder or for the appointment of a liquidator or a receiver or a receiver and manager or a trustee in bankruptcy or to have the Corporation wound up or for any other remedy hereunder;
(f) to direct any Debentureholder who, as such, has instituted any such action or other proceeding to stay or otherwise discontinue or otherwise deal with any such action or proceeding upon payment, if the taking of such action or proceeding was permitted by Section 8.05, of the costs, charges and expenses reasonably and properly incurred by such holder in connection therewith;
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(g) to sanction the exchange of Debentures for, or the conversion of Debentures into, shares, bonds, debentures, notes or any other securities or obligations of the Corporation or any other Person formed or to be formed and power to sanction the distribution in specie to Noteholders of assets of the Corporation or such shares, bonds, debentures, notes or other securities or obligations;
(h) to authorize the Trustees or any other Person to bid or tender at any sale of any Collateral and to take such actions in connection with such sale as such Person determines to be in the best interests of the Debentureholders;
(i) to authorize the transfer of the security constituted hereunder or the proceeds thereof to any other Person in exchange for cash or other assets;
(j) to establish and dissolve a committee, and to provide for the appointment of members thereof, to consult with the Trustee and to delegate to such committee (subject to such limitations, if any, as may be prescribed in the Extraordinary Resolution) all or any of the powers that the Debentureholders can exercise by Extraordinary Resolution under the foregoing Sections 11.11(a) to (i). The Extraordinary Resolution making such appointment may provide for payment of the expenses and disbursements of and compensation to such committee. Such committee will consist of such number of Persons as prescribed in the Extraordinary Resolution appointing it, and the members need not themselves be Debentureholders. Subject to the Extraordinary Resolution appointing it, every such committee may elect its chair and may make regulations respecting its quorum, the calling of its meetings, the filling of vacancies occurring in its number, the manner in which it may act and its procedure generally and such regulations may provide that the committee may act at a meeting at which a quorum is present or by resolution signed by a majority of the members thereof or the number of members thereof necessary to constitute a quorum, whichever is the greater. All acts of any such committee within the authority delegated to it will be binding upon all Debentureholders. Neither the committee nor any member thereof will be liable for any loss arising from or in connection with any action taken or omitted to be taken by them in good faith;
(k) to authorize the Trustee to grant extensions of time for payment of any principal, premium or interest on the Debentures, whether or not such principal, premium or interest is at the time due or overdue;
(l) to sanction any scheme for the reconstruction, reorganization or recapitalization of the Corporation, or for the consolidation, amalgamation or merger of the Corporation into or with any other corporation, or for the transferring, selling or leasing of the undertaking and assets or any part thereof of the Corporation, where the consent of the Debentureholders may be required thereto;
(m) to authorize the Trustee to file and prove a claim or debt against the Corporation in any proceeding involving the Corporation and to generally act for and on behalf of the Debentureholders in any such proceeding and to assent to any compromise or arrangement with any creditor or creditors or any class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation;
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(n) to indemnify any Person, including any member of any Committee appointed under Section 11.11(j) and to provide that any such indemnify will be secured by the Collateral and rank ahead of the payment of amounts owing to Debentureholders hereunder;
(o) to remove the Trustee and appoint a successor Trustee; and
(p) to repeal, modify or amend any Extraordinary Resolution previously passed by the Debentureholders.
11.12 Meaning of “Extraordinary Resolution”
(a) The expression “Extraordinary Resolution” means, subject as hereinafter provided in this Section 11.12 and in Section 11.15, a resolution passed at a meeting of Debentureholders (or of holders of a series of Debentures in respect of matters relating solely to that series) duly convened for the purpose and held in accordance with the provisions hereof at which the holders of more than 25% in principal amount of the Debentures are present in Person or by proxy and passed by the affirmative vote of the holders of not less than 66 2/3% of the principal amount of Debentures represented at the meeting and voted thereon.
(b) If at any such meeting the holders of at least 25% of the principal amount of the Debentures are not present in Person or by proxy within 30 minutes after the time appointed for the meeting, then the meeting, if convened by Debentureholders or on a Debentureholders’ Request, will be dissolved; but, if otherwise convened, the meeting will stand adjourned to such date, being not less than 10 days later, and to such place and time as may be appointed by the chair of the meeting. Not less than five days’ notice must be given of such adjourned meeting in the manner provided in Article 15. Such notice must state that at the adjourned meeting the Debentureholders present in Person or by proxy will constitute a quorum but it is not necessary to set forth the purposes for which the meeting was originally called. At the adjourned meeting, the Debentureholders present in Person or by proxy will constitute a quorum and may transact the business for which the meeting was originally convened and a resolution passed at such adjourned meeting by the affirmative vote of the holders of not less than 66-2/3% of the principal amount of Debentures represented at the meeting and voted thereon is an Extraordinary Resolution within the meaning of this Indenture.
11.13 Powers Cumulative
Any one or more of the powers and any combination of the powers in this Indenture stated to be exercisable by the Debentureholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers from time to time will not be deemed to exhaust the right of the Debentureholders to exercise such powers thereafter from time to time.
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11.14 Minutes
Minutes of all resolutions and proceedings at every meeting of the Debentureholders will be made and duly entered in books to be from time to time provided for that purpose by the Trustee at the expense of the Corporation, and any such minutes, if signed by the chair of the meeting at which such resolutions were passed or proceedings had, or by the chair of the next succeeding meeting of the Debentureholders, will be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes have been made will be deemed to have been duly held and convened, and all resolutions passed thereat or proceedings had to have been duly passed and had.
11.15 Instruments in Writing
All actions that may be taken and all powers that may be exercised by the Debentureholders by Extraordinary Resolution at a meeting held as herein provided may also be taken and exercised by the holders of 66 2/3% of the principal amount of all such Debentures by an instrument in writing signed in one or more counterparts and the expression “Extraordinary Resolution” when used in this Indenture includes an instrument so signed.
11.16 Binding Effect of Resolutions
Every resolution and every Extraordinary Resolution passed in accordance with the provisions hereof at a meeting of Debentureholders or by an instrument in writing in lieu of a meeting of Debentureholders will be binding upon all Debentureholders entitled to vote at such meeting, and each Debentureholder and the Trustee (subject to the provisions for its indemnity herein contained) will be bound to give effect accordingly to every such resolution and Extraordinary Resolution.
11.17 Series Approval
(a) If in the opinion of Counsel any business to be transacted at any meeting, or any action to be taken or power to be exercised by instrument in writing under Section 11.15 does not adversely affect the rights of the holders of Debentures of one or more particular series, the provisions of this Article 11 will apply as if the Debentures of such series were not outstanding and no notice of any such meeting need be given to the holders of Debentures of such series. Without limiting the generality of the foregoing, a proposal to modify or terminate any covenant or agreement that by its terms is effective only so long as Debentures of a particular series are outstanding or that is enacted for the exclusive benefit of the holders of Debentures of one or more particular series will be deemed not to adversely affect the rights of the holders of Debentures of any other series.
(b) If in the opinion of Counsel any business to be transacted at a meeting of Debentureholders, or any action to be taken or power to be exercised by instrument in writing under Section 11.15 would affect the rights of the Debentureholders of one or more series in a manner different from the holders of Debentures of any other series (as to which such opinion of Counsel will be binding on all Debentureholders, the Trustee and the Corporation for all purposes hereof) then
(i) reference to such fact, indicating each series so affected, will be made in the notice of such meeting and
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(ii) the holders of Debentures of a series so affected will not be bound by any action taken at such meeting or by instrument in writing under Section 11.15 unless in addition to compliance with the other provisions of this Article:
(A) at such meeting:
| (1) | there are present in Person or by proxy at least 25% of the principal amount of the outstanding Debentures of such series, subject to the provisions of this Article as to quorum at adjourned meetings; and |
| (2) | the resolution is passed by the affirmative vote of the holders of more than 50% (or in the case of an Extraordinary Resolution not less than 66 2/3%) of the principal amount of Debentures of such series voted on the resolution; or |
(B) in the case of action taken or power exercised by instrument in writing under Section 11.15, such instrument is signed in one or more counterparts by the holders of not less than 66 2/3% of the principal amount of the outstanding Debentures of such series.
(c) A proposal (a) to extend the maturity of Debentures of any particular series or reduce the principal amount thereof or the rate of interest or any redemption premium thereon, (b) to modify or terminate any covenant or agreement which by its terms is effective only so long as Debentures of a particular series are outstanding or (c) to reduce with respect to Debentureholders of any particular series or maturity any percentage stated in Sections 1.01, 8.03, 11.04, 11.07, 11.12 or 11.15 or in this Section 11.17, will be deemed to especially affect the rights of the Debentureholders of such series in a manner substantially differing from that in which it affects the rights of Debentureholders of any other series, whether or not a similar extension, reduction, modification or termination is proposed with respect to Debentures of any or all other series.
ARTICLE 12 -- SUPPLEMENTAL INDENTURES
12.01 Execution of Supplemental Indentures
(a) From time to time the Corporation (when authorized by a resolution of its Directors) and the Trustee may, subject to the provisions of this Indenture, and they must, when so directed by this Indenture, execute and deliver by their proper officers, indentures or other instruments supplemental hereto, which thereafter will form part hereof, for any one or more of the following purposes:
(i) establishing the terms of any subsequent series of Debentures and the forms and denominations in which they may be issued as provided in Article 2;
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(ii) evidencing the succession of Successor Corporations and the covenants of and obligations assumed by such Successor Corporations in accordance with the provisions of Article 10;
(iii) giving effect to any Extraordinary Resolution or other resolution;
(iv) adding to or altering the provisions hereof in respect of the registration and transfer of Debentures, making provision for the issue of Debentures in forms or denominations other than those herein provided for and for the exchange of Debentures of different forms and denominations or making any modification in the forms of the Debentures which does not affect the substance thereof;
(v) making any addition to, deletion from or alteration of the provisions of this Indenture or the Debentures that, in the opinion of Counsel, is necessary in order to comply with Applicable Law;
(vi) correcting or rectifying any ambiguity, defective provision, error or omission herein, provided that, in the opinion of the Trustee, the rights of the Debentureholders are not prejudiced thereby in any material respect; and
(vii) for any other purposes not inconsistent with the provisions of this Indenture, provided that, in the opinion of the Trustee, the rights of the Debentureholders are not prejudiced thereby in any material respect.
(b) The Trustee is hereby specifically authorized to discharge this Indenture or enter into an indenture supplemental hereto which amends this Indenture or amends and restates this Indenture upon the request of the Corporation if there are no Debentures issued and outstanding under this Indenture.
ARTICLE 13 -- ADMINISTRATION OF THE TRUST
13.01 Sufficiency of Execution of Instruments
Any order, request, direction, certificate or other instrument to be made or given by the Corporation under any of the provisions hereof will, unless otherwise provided, be deemed sufficiently executed if executed by any two officers of the Corporation holding office at the time of signing. The Trustee may receive a certificate signed by any two officers of the Corporation holding office at the time of signing as sufficient evidence of the passage of any resolution of the Directors or of the shareholders of the Corporation.
13.02 Trustee May Require Indemnity
Subject to Section 14.01, the Trustee will not be required to take any measures to enforce this Indenture or any covenant herein contained until furnished with funds for the purpose or indemnified to its reasonable satisfaction.
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13.03 Trustee May Employ Assistants
The Trustee may employ or retain such agents, counsel and other assistants as it may reasonably require for the proper discharge of its duties hereunder and may pay reasonable remuneration for all services performed for it.
13.04 Trustee May Act on Opinions or Advice
The Trustee may, in relation to this Indenture, act on the opinion or advice of or on information obtained from any Counsel, notary, valuer, surveyor, engineer, broker, auctioneer, accountant or other expert, whether obtained by the Trustee or by the Corporation or otherwise.
13.05 Trustee May Rely upon Declarations
In the exercise of its rights and duties, the Trustee may, if it is acting in good faith, rely, as to the truth of the statements and accuracy of the opinions expressed therein, upon a statutory declaration, opinion, report or certificate furnished to the Trustee under a provision hereof or at its request where the Trustee examines the same and determines that it complies with the applicable requirement, if any, of this Indenture.
13.06 Corporation Must Furnish Evidence of Compliance
The Corporation must furnish to the Trustee forthwith evidence of compliance with the conditions precedent provided for in this Indenture relating to the issue, certification and delivery of Debentures hereunder, the satisfaction and discharge of this Indenture or the taking of any other action to be taken by the Trustee at the request of or on the application of the Corporation.
Such evidence will consist of (a) Certificate of the Corporation stating that such conditions precedent have been complied with in accordance with the terms of this Indenture and (b) in the case of conditions precedent, compliance with which are by this Indenture subject to review or examination by Counsel, an opinion of Counsel that such conditions precedent have been complied with in accordance with the terms of this Indenture.
Whenever such evidence relates to a matter other than the certification and delivery of Debentures and the satisfaction and discharge of this Indenture, such evidence may consist of or otherwise be in accordance with a report or opinion of any solicitor, auditor, accountant, engineer or appraiser or any other Person whose qualifications give authority to a statement made by him or her, but if such report or opinion is furnished by a Director, officer or employee of the Corporation, it must be in the form of a Certificate of the Corporation.
Evidence furnished to the Trustee under this Section 13.06 must include (i) a statement by the Person giving the evidence declaring that such Person has read and understands the provisions hereof relating to the conditions precedent with respect to compliance with which such evidence is being given, (ii) a statement describing the nature and scope of the examination or investigation upon which the statements or opinions contained in the evidence are based and (iii) a statement declaring that, in the belief of the Person giving the evidence, such Person has made such examination or investigation as is necessary to enable such Person to make the statements or give the opinions contained or expressed therein.
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13.07 Trustee May Accept a Certificate of the Corporation
Except in cases where some other mode of proof is required by this Indenture, the Trustee will be at liberty to accept a Certificate of the Corporation (a) as to any statements of fact, as evidence of the truth of such statements, and (b) to the effect that any particular dealing or transaction or step or thing is, in the opinion of the officers so certifying, expedient, as evidence that it is expedient; provided that the Trustee may in its sole discretion require from the Corporation or otherwise further evidence or information before acting or relying on such certificate.
13.08 Trustee May Act on Instruments Believed to be Genuine
The Trustee will not be bound to act in accordance with any direction or request of the Corporation or of its Directors until a duly authenticated copy of the instrument or resolution containing such direction or request has been delivered to the Trustee, and the Trustee will be empowered to act upon any such copy purporting to be authenticated and believed by the Trustee to be genuine.
13.09 Counsel Fees Need Not be Assessed
Whenever by this Indenture the Trustee is authorized to employ Counsel, the costs of such Counsel need not be judicially assessed unless the Trustee or the Corporation deems it necessary to assess the same, but may be fixed by the Trustee and paid as a lump sum whether incurred before or after a declaration has been made under Section 8.02 or before or during proceedings taken to enforce the provisions of this Indenture and no costs paid in good faith by the Trustee under the provisions of this Section 13.09 will be disallowed in the taking of any accounts by reason only of the fact that such costs are greater than they might have been if assessed or by reason of their not having been assessed but such costs so paid by the Trustee will be allowed and paid to the Trustee.
13.10 No Person Dealing with Trustee Need Enquire
No Person dealing with the Trustee or a Receiver will be concerned to enquire whether the powers that the Trustee or the Receiver is purporting to exercise have become exercisable, or whether any money remains due upon the Debentures or to see to the application of any money paid to the Trustee or the Receiver.
13.11 Investment of Trust Funds
Any money held by the Trustee, which under the trusts of this Indenture may be invested, must be invested and reinvested by the Trustee in its name or under its control in any Authorized Investment.
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ARTICLE 14 -- CONCERNING THE TRUSTEE
14.01 Duty of Care of Trustee
In the exercise of the powers, rights, duties and obligations prescribed or conferred by the terms of this Indenture, the Trustee must exercise that degree of care, diligence and skill that a reasonably prudent trustee would exercise in comparable circumstances.
14.02 Resignation, etc. of Trustee and Appointment of New Trustee
The Trustee may resign its trust and be discharged from all further duties and liabilities hereunder by giving to the Corporation three months’ notice in writing or such shorter notice as the Corporation may accept as sufficient. If at any time a material conflict of interest in the Trustee’s role as a fiduciary hereunder arises, the Trustee must, within 30 days after ascertaining that it has such a conflict, either eliminate such conflict or resign in the manner and with the effect specified in this Section 14.02. In the event of the Trustee resigning or being removed by the Debentureholders by Extraordinary Resolution or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Corporation must forthwith appoint a new Trustee unless a new Trustee has already been appointed by the Debentureholders; failing such appointment by the Corporation, the retiring Trustee or any Debentureholder may apply to a Judge of the Ontario Superior Court of Justice, on such notice as such Judge may direct, for the appointment of a new Trustee; but any new Trustee so appointed by the Corporation or by the Court will be subject to removal as aforesaid by the Debentureholders. Any new Trustee appointed under any provision of this Section 14.02 must be a corporation authorized to carry on the business of a trust company in the Province of Ontario. On any new appointment the new Trustee will be vested with the same powers, rights, duties and obligations as if it had been originally named herein as Trustee.
Any corporation into which the Trustee may be merged or with which it may be consolidated or amalgamated or any corporation resulting from any merger, consolidation or amalgamation to which the Trustee is a party will be the successor Trustee under this Indenture without the execution of any instrument or any further act.
14.03 Trustee May Deal in Debentures
Subject to Section 14.07, the Trustee may buy, lend upon and deal in the Debentures either with the Corporation or otherwise, and generally contract and enter into financial transactions with the Corporation or otherwise, without being liable to account for any profit made thereby.
14.04 Trustee Not Required to Give Security
The Trustee will not be required to give security for the execution of the trusts or its conduct or administration hereunder.
14.05 Protection of Trustee
By way of supplement to the provisions of any law for the time being relating to trustees, it is expressly declared and agreed as follows:
(a) the Trustee will not be liable for or by reason of any statements of facts or recitals in this Indenture or in the Debentures (except the representation contained in Section 14.07 and in the certificate of the Trustee on the Debentures) or required to verify the same, but all such statements or recitals are deemed to be made by the Corporation;
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(b) nothing herein contained will impose any obligation on the Trustee to see or to require evidence of registration or filing (or renewals thereof) of this Indenture or any instrument ancillary or supplemental hereto;
(c) the Trustee will not be bound to give any notice of the execution hereof; and
(d) the Trustee will not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach on the part of the Corporation of any of the covenants herein contained or of any act of the agents or servants of the Corporation.
14.06 Indemnification of Trustee
The Trustee will at all times be indemnified and saved harmless by the Corporation from and against all claims, demands, losses, actions, causes of action, costs, charges, expenses, damages and liabilities whatsoever arising in connection with this Indenture including those arising out of or related to actions taken or omitted to be taken by the Trustee contemplated hereby, legal fees and disbursements on a solicitor and client basis and costs and expenses incurred in connection with the enforcement of this indemnity, that the Trustee may suffer or incur, whether at law or in equity, in any way caused by or arising, directly or indirectly, in respect of any act, deed, matter or thing whatsoever made, done, acquiesced in or omitted in or about or in relation to the execution of its duties as Trustee and including any deed, matter or thing in relation to the registration, perfection, release or discharge of security. The foregoing provisions of this Section 14.06 do not apply to the extent that in any circumstances there has been a failure by the Trustee or its employees or agents to act honestly and in good faith or to discharge the Trustee’s obligations under Section 14.01. This indemnity will survive the termination or discharge of this Indenture and the resignation of the Trustee.
14.07 Conflict of Interest
The Trustee represents to the Corporation that at the time of the execution and delivery hereof no material conflict of interest exists in the Trustee’s role as a fiduciary hereunder and agrees that in the event of a material conflict of interest arising hereafter it will, within 30 days after ascertaining that it has such material conflict of interest, either eliminate the same or resign its trust hereunder.
14.08 Acceptance of Trusts
The Trustee hereby accepts the Trusts in this Indenture declared and provided and agrees to perform the same upon the terms and conditions herein set forth.
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ARTICLE 15 -- NOTICES
15.01 Notice to Corporation
Any notice to the Corporation under the provisions hereof will be valid and effective if mailed by registered letter, postage prepaid, addressed to the Corporation at 110 Yonge Street, Suite 1601, Toronto, Ontario, M5C 1T4, Attention: Michel Amar, Chief Executive Officer and, subject as provided in this Section 15.01, will be deemed to have been given at the time of delivery or sending by facsimile or on the third Business Day after mailing. Any delivery made or facsimile sent on a day other than a Business Day, or after 3:00 p.m. (Toronto time) on a Business Day, will be deemed to be received on the next following Business Day. The Corporation may from time to time notify the Trustee of a change in address or facsimile number which thereafter, until changed by like notice, will be the address or facsimile number of the Corporation for all purposes of this Indenture.
15.02 Notice to Debentureholders
Any notice to the Debentureholders under the provisions hereof will be valid and effective if delivered, sent by electronic communication or mailed by first class mail, postage prepaid, addressed to such holders, at their addresses or electronic communication numbers, if any, appearing in any of the registers hereinbefore mentioned and, subject as provided in this Section 15.02, will be deemed to have been received at the time of delivery or sending by electronic communication or on the third Business Day after mailing. Any delivery made or electronic communication sent on a day other than a Business Day, or after 3:00 p.m. (Toronto time) on a Business Day, will be deemed to be received on the next following Business Day. During periods of postal strike or disruption, notice to holders of Debentures must, in addition, be given by publication once in the national edition of The Globe and Mail or, if such publication is impracticable, by publication once in any newspaper published in the English language having general circulation in Canada. All notices to joint holders of any Debenture may be given to whichever one of the holders thereof is named first in the registers hereinbefore mentioned, and any notice so given will be sufficient notice to all holders of such Debenture.
15.03 Notice to Trustee
Any notice to the Trustee under the provisions hereof will be valid and effective if (a) delivered to [●], Attention: [●], (b) sent by facsimile to [●] or (c) mailed by registered letter, postage prepaid, to the Trustee at [●], Attention: [●], and, subject as provided in this Section 15.03, will be deemed to have been given at the time of delivery or sending by facsimile or on the third Business Day after mailing. Any delivery made or facsimile sent on a day other than a Business Day, or after 3:00 p.m. (Toronto time) on a Business Day, will be deemed to be received on the next following Business Day. The Trustee may from time to time notify the Corporation of a change in address or facsimile number which thereafter, until changed by like notice, will be the address or facsimile number of the Trustee for all purposes of this Indenture.
15.04 Waiver
Where this Indenture or any Debenture provides for or permits notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver will be the equivalent of such notice. Waivers of notice by Debentureholders will be filed with the Trustee, but such filing will not be a condition precedent to the validity of any action taken in reliance upon such waiver.
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ARTICLE 16 -- EXECUTION
16.01 Counterparts and Formal Date
This Indenture may be executed in several counterparts, each of which so executed will be deemed to be an original, and such counterparts together will constitute one and the same instrument and notwithstanding their date of execution will be deemed to bear date as of [●].
IN WITNESS WHEREOF the parties hereto have executed this Indenture.
| DIGI POWER X INC. | ||
| Per: | ||
| Michel Amar | ||
| Chief Executive Officer | ||
| Paul Ciullo | ||
| Chief Financial Officer | ||
| [●] | ||
| Per: | ||
| [●] | ||
| [●] | ||
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SCHEDULE 2.02
FORM OF SERIES A DEBENTURES
| No. | $ |
DIGI POWER X INC.
(Incorporated under the laws of British Columbia)
[●] % DEBENTURE, SERIES A
DUE [●], 20[●]
Digi Power X Inc. (the “Corporation”), for value received, hereby promises to pay to the registered holder hereof on [●], or on such earlier date as the principal hereof becomes payable in accordance with the provisions of the Indenture hereinafter mentioned, the principal sum of $[●] in lawful money of Canada, on presentment and surrender of this Debenture at any place designated in any notice of redemption, at the holder’s option, and to pay interest on the principal amount hereof from and including the date hereof or from the last date on which interest has been paid or made available for payment on the Debentures, whichever is later, at the rate of [●] per cent per annum ([●]%), in like money, semi-annually on April 30 and October 31 in each year (each an “Interest Payment Date”) (unless this Debenture has been previously redeemed in accordance with the provisions of the Indenture); and should the Corporation at any time make default in the payment of any principal or interest or redemption premium, to pay interest on the amount in default at the same rate, in like money and on a semi-annual basis on the same dates.
The Corporation must, prior to each Interest Payment Date, mail, or cause to be mailed, a cheque for such interest (less any tax required to be deducted or withheld) to the address of the holder appearing on the register or, if directed by the holder of such Debenture, the Corporation must, on the due date, wire transfer funds for such interest (less any tax required to be deducted or withheld) to an account maintained by the holder with a bank in Canada. Any such direction to the Corporation must be in writing and received by the Corporation and the Trustee at least 15 Business Days prior to such Interest Payment Date. Notwithstanding the foregoing, interest payable at maturity or on redemption may, at the option of the Corporation, be paid on presentation and surrender of the Debenture for payment.
This Debenture is one of the Debentures designated [●]% Debentures, Series A (the “Debentures”) issued or to be issued under a Indenture ( the “Indenture”) made as of [●], 20[●] between the Corporation and [●] (the “Trustee”), as Trustee, to which Indenture and all instruments supplemental thereto reference is made for a description of the terms and conditions upon which the Debentures are issued and held and the rights of the holders of the Debentures and of the Corporation and of the Trustee, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which the holder, by acceptance hereof, assents. Terms defined in the Indenture are used in this Debenture with the defined meanings. This Debenture and all other Debentures certified and issued under the Indenture rank pari passu. The Debentures are direct obligations of the Corporation and are secured by a fixed and floating charge on all the undertaking and assets of the Corporation.
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The Debentures will not be redeemable before [●]. Subject to the foregoing, the Debentures are subject to redemption upon the terms set forth in the Indenture, at any time on or after [●], at the option of the Corporation. Any such redemption will take place for an amount equal to the greater of the Canada Yield Price as defined in the Indenture and the principal amount thereof together with unpaid interest accrued to, but not including, the date fixed for redemption.
This Debenture, if for a principal amount in excess of $[●], is subject to redemption in part (being $[●] or a multiple thereof) all as more fully provided in the Indenture.
In case an Event of Default has occurred and is continuing, the principal of all Debentures then outstanding under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for the holding of meetings of Debentureholders and for binding all Debentureholders by resolutions passed at such meetings by the holders of not less than a specified percentage of the principal amount of the Debentures represented and voted or by instruments in writing signed by the holders of not less than a specified percentage of the principal amount of the Debentures.
Upon presentment at the principal office of the Trustee in one of the cities of [●], subject to the provisions of the Indenture and upon compliance with the reasonable requirements of the Trustee: (a) Debentures of any denomination may be exchanged for Debentures of any authorized denomination or denominations of the same aggregate principal amount and (b) a Debenture may be transferred by the registered holder thereof or such holder’s executors, administrators or other legal representatives or attorney duly appointed in writing but no such transfer of a Debenture will be valid as against the Corporation unless it has been duly noted on one of the registers maintained for that purpose.
This Debenture will not become obligatory for any purpose until it is certified by or on behalf of the Trustee for the time being under the Indenture.
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IN WITNESS WHEREOF the Corporation has caused this Debenture to be signed by its [●] and its [●] as of [●].
| Per: | ||
| Michel Amar | ||
| Chief Executive Officer | ||
| Paul Ciullo | ||
| Chief Financial Officer |
(FORM OF TRUSTEE’S CERTIFICATE)
TRUSTEE’S CERTIFICATE
This Debenture is one of the [●]% Debentures, Series A referred to in the Indenture within mentioned.
| [●], Trustee | ||
| By: | ||
| Authorized Signature | ||
(FORM OF REGISTRATION PANEL)
(No writing hereon except by the Trustee or other registrar)
|
Date of Registration |
In Whose Name Registered | Trustee or Registrar |
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SCHEDULE 7.02(c)
COMPLIANCE CERTIFICATE
TO [●]
| 1. | This Compliance Certificate is delivered to you pursuant to Section 7.02(c) of the Trust Indenture (the “Indenture”) made as of 20[●] between Digi Power X Inc. (the “Corporation”) and [●]. Terms used in this Compliance Certificate that are defined in the Indenture have the same meanings herein as in the Indenture. |
| 2. | All the covenants of the Corporation contained in Article 7 of the Indenture have been fully complied with to the date hereof. |
| 3. | No Event of Default, or event which with the giving of notice or lapse of time or both would constitute an Event of Default, has occurred during the period to which this certificate relates and remains outstanding as of the date hereof. |
| 4. | Attached hereto are the financial statements of most recent date referred to in Section 7.02(a) and 7.01(b) of the Indenture, from which the figures and calculations expressed herein are based. |
The foregoing is a summary and the actual calculations are based on the actual covenants and definitions in the Indenture.
DATED [●], 20[●]
| Per: | Paul Ciullo | |
| Chief Financial Officer |
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Exhibit 5.1
April 9, 2026
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario M5C 1T4
| Re: | Securities Registered under Registration Statement on Form S-3 |
Ladies and Gentlemen:
We have acted as British Columbia counsel to you in connection with your filing of a Registration Statement on Form S-3 (as amended or supplemented, the “Registration Statement”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), relating to the offering by Digi Power X Inc., a company governed by the Business Corporations Act (British Columbia) (the “Company”), from time to time of any combination of (i) subordinate voting shares of the Company (the “Shares”), (ii) debt securities of the Company (“Debt Securities”), (iii) warrants to purchase Shares or Debt Securities (“Warrants”), (iv) subscription receipts to purchase Shares, Warrants, or a combination of Shares and Warrants (“Subscription Receipts”); (v) share purchase contracts in respect of the future purchase or sale of Shares (“Share Purchase Contracts”); (vi) rights to purchase securities of the Company (“Rights”); and (vii) units comprised of Shares, Warrants or other securities of the Company in any combination (“Units”).
The Shares, Debt Securities, Warrants, Subscription Receipts, Share Purchase Contracts, Rights and Units are sometimes referred to collectively herein as the “Securities”. Securities may be issued in an unspecified number (with respect to Shares, Warrants, Subscription Receipts, Share Purchase Contracts, Rights and Units) or in an unspecified principal amount (with respect to Debt Securities). The Registration Statement provides that the Securities may be offered together or separately, in one or more offerings, in amounts, at prices and on the terms that the Company will determine at the time of the offering and which will be set forth in a prospectus supplement (each a “Prospectus Supplement”) to the prospectus contained in the Registration Statement.
We have examined the Registration Statement and, for the purposes of this opinion, we have also examined originals or copies, certified or otherwise identified to our satisfaction, of and relied upon the notice of articles (the “Notice of Articles”) and the articles of the Company (the “Articles”). We have considered such questions of law and examined such public and corporate records, certificates and other documents and conducted such other examinations as we have considered necessary to give the opinions set forth below. We have relied, without independent verification, on certificates of public officials and, as to certain factual matters, upon certificates of officers of the Company.
We have assumed the legal capacity of all individuals, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed, electronic, photostatic or facsimile copies.
The opinions expressed below are limited solely to the laws of the Province of British Columbia and the federal laws of Canada applicable therein.
For purposes of the opinions set forth below, without limiting any other exceptions or qualifications set forth herein, we have assumed that (i) the Registration Statement and any amendments thereto (including post-effective amendments) will have become effective and such effectiveness shall not have been terminated or rescinded; (ii) the Securities will have the terms described in and will otherwise be issued as described in the Registration Statement or in a Prospectus Supplement and a Prospectus Supplement will have been prepared and filed with the SEC regarding the Securities offered thereby; (iii) all Securities will be issued and sold in compliance with applicable U.S. federal and state securities laws and in the manner specified in the Registration Statement and the applicable Prospectus Supplement; (iv) there shall not have occurred any change in law affecting the validity or enforceability of such Securities; (v) at the time of the issuance of any Securities not issued and outstanding as at the date hereof, the Company will be a validly existing company under the law of its jurisdiction of incorporation, (vi) all the foregoing actions to be taken by the Company will have been taken so as not to violate any applicable law and so as to comply with any requirement or restriction imposed by any court or governmental or regulatory body having jurisdiction over the Company or any of its property, (vii) each of the Debt Securities, Warrants, Subscription Receipts, Share Purchase Contracts, Convertible Securities, Rights and Units, and the indentures and agreements governing Securities offered pursuant to the Registration Statement will be enforceable against each of the parties thereto (other than the Company) in accordance with their terms, (viii) any agreements pursuant to which Debt Securities or Subscription Receipts shall be offered or issued will be governed by Canadian law or the laws of a province thereof; and (viii) after the issuance of any Securities offered pursuant to the Registration Statement, the total number of issued and outstanding Shares, together with the total number of such shares issuable upon the exercise, exchange, conversion or settlement, as the case may be, of any exercisable, exchangeable or convertible Security, as the case may be, then outstanding, will not exceed the total number of authorized Shares available for issuance under either the Registration Statement or the Articles then in effect, if any.
For purposes of the opinions set forth below, we refer to the following as the “Future Authorization and Issuance” of Securities:
| ● | with respect to any of the Securities, (a) the authorization by the Company of the amount, terms and issuance of such Securities (the “Authorization”), and (b) the issuance of such Securities in accordance with the Authorization therefor upon the receipt by the Company of the consideration to be paid therefor in accordance with the Authorization; |
| ● | with respect to Debt Securities, (a) the authorization, execution and delivery of the indenture or a supplemental indenture relating to such Securities by the Company and the trustee thereunder, and/or (b) the establishment of the terms of such Securities by the Company in conformity with the applicable indenture or supplemental indenture and applicable law, and (c) the execution, authentication and issuance of such Securities in accordance with the applicable indenture or supplemental indenture and applicable law; and |
| ● | with respect to Warrants, Subscription Receipts, Share Purchase Contracts, Convertible Securities, Rights or Units, (a) the authorization, execution and delivery by the Company and the other parties thereto of any agreement under which such Securities are to be issued, and (b) the establishment of the terms of such Securities and the issuance of such Securities in conformity with those terms, the terms of any applicable agreement and applicable law. |
Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that:
| 1. | Upon the Future Authorization and Issuance of Shares, such Shares will be validly issued, fully paid and nonassessable Shares. |
| 2. | Upon the Future Authorization and Issuance of Debt Securities, such Debt Securities will be valid and binding obligations of the Company. |
| 3. | Upon the Future Authorization and Issuance of Warrants, such Warrants will be valid and binding obligations of the Company. |
| 4. | Upon the Future Authorization and Issuance of Subscription Receipts, such Subscription Receipts will be valid and binding obligations of the Company. |
| 5. | Upon the Future Authorization and Issuance of Share Purchase Contracts, such Share Purchase Contracts will be valid and binding obligations of the Company. |
| 6. | Upon the Future Authorization and Issuance of Convertible Securities, such Convertible Securities will be valid and binding obligations of the Company. |
| 7. | Upon the Future Authorization and Issuance of Rights, such Rights will be valid and binding obligations of the Company. |
| 8. | Upon the Future Authorization and Issuance of Units, such Units will be valid and binding obligations of the Company. |
The opinions expressed above are subject to bankruptcy, insolvency, fraudulent transfer and conveyance, reorganization, receivership, preference, arrangement, moratorium or winding-up laws and other similar laws, regulations and judicial doctrines relating to or affecting the rights and remedies of creditors and to general principles of equity and statutory limitation periods.
We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the Registration Statement and to the references to our firm under the caption “Legal Matters” in the Registration Statement. We hereby further consent to Katten Muchin Rosenman LLP, as United States counsel to the Corporation, relying on this opinion in connection with the delivery of their opinion with respect to certain of the Securities that may be offered under the Registration Statement.
In giving our consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
Yours very truly,
/s/ MLT Aikins LLP
Exhibit 5.2
 | ||
| 525 W. Monroe Street | ||
| Chicago, IL 60661-3693 | ||
| +1.312.902.5200 tel | ||
| katten.com |
April 9, 2026
|
Digi Power X Inc. 110 Yonge Street, Suite 1601 Toronto, Ontario, M5C 1T4, Canada |
| Re: | Digi Power X Inc. |
| Registration Statement on Form S-3 |
Ladies and Gentlemen:
We have acted as special U.S. counsel to Digi Power X Inc., a corporation organized under the Business Corporations Act (British Columbia) (the “Company”), in connection with the preparation of a registration statement on Form S-3 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Act”), with respect to the registration by the Company (1) of 1,293,746 SV Shares (as defined hereinafter) for resale by the Investors (as hereinafter defined) consisting of (a) 501,788 SV Shares previously issued to investors in the Corporation’s private placement in August 2024 (the “Investors” and the private placement in which the Investors participated, the “August 2024 private placement”), (b) 522,727 issuable upon exercise, if any, of warrants previously issued to the Investors in the August 2024 private placement and (c) 269,231 SV Shares issuable upon exercise of a warrant held by H.C. Wainwright & Co., LLC and (2) the public offering, from time to time, pursuant to Rule 415 under the Act, of up to $750,000,000 in aggregate amount of securities, consisting of the following:
(i) subordinate voting shares, without par value, of the Company (“SV Shares”);
(ii) debt securities of the Company (“Debt Securities”);
(iii) warrants to purchase SV Shares and/or Debt Securities (“Warrants”);
(iv) subscription receipts for SV Shares, Warrants or a combination of SV Shares and Warrants (“Subscription Receipts”);
(v) share purchase contracts to purchase from or sell to the Company specified SV Shares (“Share Purchase Contracts”);
(vi) rights to purchase one of more of the other Securities (as hereinafter defined) (“Rights”); and
(vii) units comprised of one or more of the securities described above in any combination (“Units”).
The SV Shares, Debt Securities, Warrants, Subscription Receipts, Share Purchase Contracts, Rights, and Units, including to the extent one or more of the foregoing are also convertible or exchangeable for one or more other of the foregoing, are referred to collectively herein as the “Securities.”
KATTEN MUCHIN ROSENMAN LLP
CENTURY
CITY CHARLOTTE CHICAGO
DALLAS HOUSTON
LOS ANGELES
NEW YORK ORANGE COUNTY SHANGHAI
WASHINGTON, DC
A limited liability partnership including professional corporations
LONDON: KATTEN MUCHIN ROSENMAN UK LLP
Digi Power X Inc.
April 9, 2026
Page 2
This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act in respect of the Warrants, the Rights and the Units.
In connection with this opinion, we have relied as to matters of fact, without investigation, upon certificates of public officials and officers of the Company. We have also relied, to the extent we have determined such reliance to be appropriate, without independent investigation and with the permission of MLT Aikins LLP, on the opinion of MLT Aikins LLP of even date herewith, as Canadian counsel to the Company, which is filed as Exhibit 5.1 to the Registration Statement. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such instruments, documents and records as we have deemed relevant and necessary to examine for the purpose of this opinion, including the Registration Statement.
In connection with this opinion, we have assumed at all applicable times the legal capacity of all natural persons, the accuracy and completeness of all documents and records that we have reviewed, the genuineness of all signatures, the due authority of the parties signing such documents, the authenticity of the documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as certified, conformed or reproduced copies. We have assumed that the Company is, and at all times will be, duly organized and in good standing under the laws of British Columbia and has or will have the corporate power and authority to enter into and to perform its obligations under and, in respect of, the Debt Securities, the Subscription Receipts, the Share Purchase Contracts, the Rights, the Warrants and the Units, and under and in respect of all agreements and instruments under which any such Securities shall be offered or issued, and with respect to documents executed or to be executed by parties other than the Company (“Other Parties”), we have assumed that such Other Parties had or will have the power and authority, corporate or other, to enter into and to perform all obligations thereunder and have also assumed the valid existence of such Other Parties, the due authorization by all requisite action, corporate or other, and the execution and delivery by such Other Parties of such documents and the validity and binding effect thereof on such Other Parties.
In addition, we have assumed that: (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will, to the extent applicable, have become effective under the Act, and such effectiveness shall not have been terminated or rescinded; (ii) a prospectus supplement and any required pricing supplement will have been timely filed with the Commission describing the Securities offered thereby; (iii) all Debt Securities, Subscription Receipts, Share Purchase Contracts, Rights, Warrants and Units will be issued and sold in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement, the applicable prospectus supplement and any applicable pricing supplement; (iv) a definitive purchase, underwriting or similar agreement with respect to any Warrants, Rights or Units offered will be duly authorized and validly executed and delivered by the Company and the other parties thereto; (v) any Securities issuable upon conversion, exchange, redemption or exercise of any other Securities being offered will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange, redemption or exercise; (vi) there will be no terms or provisions contained in any agreement pursuant to which any Securities are to be issued that would affect the opinions rendered herein; (vii) any agreements pursuant to which Debt Securities or Subscription Receipts shall be offered or issued will be governed by Canadian law or the laws of a province thereof, and all other agreements pursuant to which any other Securities shall be offered or issued shall be governed by New York law; and (viii) all actions are taken by the Company (A) so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon the Company and (B) so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company.
Digi Power X Inc.
April 9, 2026
Page 3
Our opinions set forth below are subject to (i) the effects of bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting the rights and remedies of creditors generally (including, without limitation, the effect of statutory and other laws regarding fraudulent conveyances, fraudulent transfers and preferential transfers), (ii) the exercise of judicial discretion and the application of principles of equity, good faith, fair dealing, reasonableness, conscionability and materiality (regardless of whether the enforceability of the applicable Securities is considered in a proceeding at law or in equity), (iii) the possible unenforceability of indemnity, exculpation and contribution provisions, (iv) the effect and possible unenforceability of choice of law provisions, (v) the possible unenforceability of provisions purporting to waive rights or defenses where such waiver is against public policy, (vi) the possible unenforceability of provisions purporting to exonerate any party for negligence or malfeasance, or to negate any remedy of any party for fraud, (vii) the possible unenforceability of forum selection clauses, (viii) the possible unenforceability of provisions permitting modification of an agreement only in writing, and (ix) the possible unenforceability of provisions purporting to allow action without regard to mitigation of damages.
Insofar as the opinion in paragraph (2) below relates to the valid issuance of the Rights, (i) our opinion addresses the corporate procedures used in connection with the issuance of the Rights to acquire one or more of the other Securities, and not any particular provision of the Rights or the applicable Rights Agreement (as hereinafter defined), and it is not settled whether the invalidity of any particular provision of a rights agreement or of rights issued thereunder would result in invalidating such rights in their entirety; (ii) our opinion does not address whether a court of competent jurisdiction may require the Company’s board of directors (the “Board”) to redeem, terminate or take any other action with respect to the Rights or the applicable Rights Agreement in the future based on the facts and circumstances then existing; and (iii) we have assumed that members of the Board will have acted in a manner consistent with their fiduciary duties as required under applicable law in adopting the applicable Rights Agreement.
Digi Power X Inc.
April 9, 2026
Page 4
On the basis of the foregoing and the other matters set forth herein, we hereby are of the opinion that:
(1) Warrants. With respect to any Warrants, to the extent such Warrants and the Warrant Agreement (as hereinafter defined) are governed by New York law, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of such Warrants, the terms, issuance, execution and delivery of any warrant agreements and/or warrant indenture governing the Warrants (collectively, “Warrant Agreements”), and the terms of the offering thereof and related matters, (b) to the extent applicable, the Warrant Agreements have been duly authorized and validly executed and delivered by all of the parties thereto, and (c) such Warrants have been duly executed, attested, issued and delivered by duly authorized officers of the Company in accordance with (i) the provisions of any applicable Warrant Agreement and (ii) any applicable definitive purchase, underwriting or similar agreement approved by the Board and duly executed and delivered by the Company, or upon the conversion, exercise, redemption or exchange of other Securities in accordance with the terms of such Securities or the instrument governing such Securities providing for such conversion, exercise, redemption or exchange as approved by the Board, upon payment of the consideration therefor as provided therein, such Warrants and the related Warrant Agreements will constitute valid and binding obligations of the Company.
(2) Rights. With respect to the Rights to be issued, to the extent such Rights and the Rights Agreement (as hereinafter defined) are governed by New York law, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of such Rights, the terms, issuance, execution and delivery of any rights agreement governing the Rights (collectively, “Rights Agreements”), and the terms of the offering thereof and related matters, (b) to the extent applicable, the Rights Agreements have been duly authorized and validly executed and delivered by all of the parties thereto, and (c) any certificates representing such Rights have been duly executed, attested, issued and delivered by duly authorized officers of the Company in accordance with the provisions of any applicable Rights Agreement, upon payment of the consideration therefor provided therein, the Rights and the related Rights Agreement will constitute valid and binding obligations of the Company.
(3) Units. With respect to any Units, to the extent such Units are governed by a unit agreement (a “Unit Agreement”) and such Units, the related Unit Agreement (as hereinafter defined) and the Securities underlying such Units are governed by New York law, when (a) the Board has taken all necessary corporate action to approve the issuance and terms of such Units, the terms, issuance, execution and delivery of the Unit Agreement governing such Units, and the terms of the offering thereof and related matters, (b) to the extent applicable, the Unit Agreement has been duly authorized and validly executed and delivered by all of the parties thereto, (c) such Units have been duly executed, attested, issued and delivered by duly authorized officers of the Company in accordance with (i) the provisions of any applicable Unit Agreement and (ii) any applicable definitive purchase, underwriting or similar agreement approved by the Board and duly executed and delivered by the Company, or upon the conversion, exercise, redemption or exchange of other Securities in accordance with the terms of such Securities or the instrument governing such Securities providing for such conversion, exercise, redemption or exchange as approved by the Board, and (d) the Securities to be issued as part of such Units have been duly and validly authorized and reserved for issuance, upon payment of the consideration therefor as provided therein, such Units and the related Unit Agreement will constitute valid and binding obligations of the Company.
Digi Power X Inc.
April 9, 2026
Page 5
Our opinions expressed above are subject to all of the limitations and qualifications contained herein. Our opinions expressed above are limited to the laws of the State of New York, and we do not express any opinion herein concerning any other law. We express no opinion herein concerning any SV Shares, Debt Securities, Subscription Receipts or Share Purchase Contracts, in each case, individually or as part of, or as issuable upon exercise of or otherwise pursuant to, any Warrants, Rights or Units, which we assume will be governed by Canadian law or the laws of a province thereof. In addition, we express no opinion herein concerning any statutes, ordinances, administrative decisions, rules or regulations of any county, town, municipality or special political subdivision (whether created or enabled through legislative action at the federal, state or regional level). This opinion is given as of the date hereof and as of the effective date of the Registration Statement, and we assume no obligation to advise you of changes that may thereafter occur or be brought to our attention.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.2 to the Registration Statement. We also consent to the reference to our firm under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving this consent, we do not thereby admit that we are experts within the meaning of Section 11 of the Act or included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
Sincerely,
/s/ KATTEN MUCHIN ROSENMAN LLP
KATTEN MUCHIN ROSENMAN LLP
Exhibit 5.3
April 9, 2026
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario M5C 1T4
Dear Sirs/Mesdames:
| Re: | Digi Power X Inc. - Resale by Selling Shareholders |
We have acted as counsel to Digi Power X Inc., a corporation governed by the Business Corporations Act (British Columbia) (the “Issuer”), in connection with a registration statement on Form S-3 (the “Registration Statement”), filed by the Issuer with the U.S. Securities and Exchange Commission (the “Commission”) on April 9, 2026, including a prospectus (the “Prospectus”) relating to the resale by the selling shareholders named in the Prospectus (the “Selling Shareholders”) of up to 1,293,746 subordinated voting shares of the Issuer (the “Resale Shares” and the offering of such Resale Shares, the “Offering”), consisting of (i) 501,788 previously issued subordinate voting shares in a private placement transaction with the Issuer in August 2024, in each case, held by certain of the Selling Shareholders (the “Private Placement Shares”), (ii) 522,727 subordinate voting shares (the “Warrant Shares”) issuable upon the exercise of subordinate voting share purchase warrants (the “Warrants”) issued in 2024 Private Placement, in each case, held by certain of the Selling Shareholders, and (iii) up to 269,231 subordinate voting shares issuable upon the exercise of a subordinate voting share purchase warrant (the “Settlement Shares” and together with the Warrant Shares, the “Subject Shares”) issued to H.C. Wainwright & Co., LLC, a Delaware limited liability company (“Wainwright”), pursuant to that certain Settlement and Release Agreement (the “Settlement Agreement”) dated as of December 19, 2025, by and between the Issuer and Wainwright.
For the purposes of this opinion letter, we have examined and relied upon originals or copies of the following documents (collectively, the “Corporate Documents”):
| (a) | a certificate of good standing issued by the British Columbia Registrar of Companies with respect to the Issuer dated April 9, 2026; |
| (b) | certificate of a senior officer of the Issuer dated April 9, 2026 (the “Officer’s Certificate”); |
| (c) | the certificate of incorporation and the articles of the Issuer attached to the Officer’s Certificate; and |
| (d) | certain resolutions of the Issuer’s directors relating to the Offering attached to the Officer’s Certificate. |
We have relied upon the Corporate Documents as to the matters provided for in them, without independent investigation, for purposes of providing our opinions expressed below. We have not conducted a review of the minute books of the Issuer.
In examining all documents and in providing our opinions below we have assumed that:
| (a) | all individuals had the requisite legal capacity; |
| (b) | all signatures are genuine; |
| (c) | all documents submitted to us as originals are complete and authentic and all photostatic, certified, telecopied, notarial or other copies conform to the originals; |
| (d) | all facts set forth in the official public records, certificates and documents supplied by public officials or otherwise conveyed to us by public officials are complete, true and accurate as of the date hereof; |
| (e) | the certificate of incorporation is conclusive evidence that the Issuer is incorporated under the Business Corporations Act (British Columbia); |
| (f) | all facts set forth in the certificates supplied by the respective officers and directors of the Issuer including, without limitation, the Officer’s Certificate are complete, true and accurate as of the date hereof; |
| (g) | no order, ruling or decision of any court or regulatory or administrative body is in effect at any relevant time that restricts the resale of any of the Resale Shares; |
| (h) | there is no non Canadian law that would affect the opinion expressed herein; |
| (i) | at the time of the execution and delivery of any documents relating to the Resale Shares or the offering thereof, to the extent such documents purport to constitute agreements, such documents will constitute valid and binding obligations of such parties; and |
| (j) | each of the Warrants and the Settlement Agreement (i) has been duly authorized, executed and delivered by all parties thereto other than the Issuer (the “Other Parties”), and such Other Parties had the capacity to do so; (ii) constitutes a legal, valid and binding obligation of all Other Parties thereto; and (iii) is enforceable in accordance with its terms against all Other Parties thereto. |
Our opinions set forth below are expressed only with respect to the laws of the Province of British Columbia and the laws of Canada applicable therein in effect on the date of this opinion letter. Any reference to the laws of British Columbia includes the laws of Canada that apply in British Columbia. We have no responsibility or obligation to (i) update this opinion letter, (ii) take into account or inform the addressees 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 addressees or any other person of any other change in any matter addressed in this opinion letter. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion letter to any person other than the addressees.
2
Whenever our opinion with respect to the existence or absence of facts or circumstances is qualified by the expression, “to our knowledge” or words to like effect, it is based solely on (i) actual knowledge of current partners and associates directly involved in the Offering learned during the course of representing the Issuer and (ii) a review of the Corporate Documents referred to above. We have not undertaken any other investigation.
Based on the above, and subject to the qualifications below, we are of the opinion that on the date hereof:
| 1. | the Private Placement Shares have been validly issued as fully paid and non-assessable subordinate voting shares in the capital of the Issuer; and |
| 2. | the Subject Shares, when issued, sold and delivered in the manner and for the consideration set forth in, and in accordance with the Warrants and the Settlement Agreement, as applicable, and the Corporate Documents, upon payment of the consideration provided therein to the Issuer, will be validly issued as fully paid and non-assessable subordinate voting shares in the capital of the Issuer. |
We hereby consent to the use of our name under the heading “Legal Matters” in the Prospectus. We also hereby consent to the filing of this opinion letter with the Commission as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Where our opinion refers to securities to be issued as being “fully paid and non-assessable”, such opinion assumes that all required consideration (in whatever form) has or will be paid or provided and no opinion is expressed as to the adequacy of any such consideration paid or provided.
This opinion letter is solely for the benefit of the addressee and not for the benefit of any other person. It is rendered solely in connection with the Offering. It may not be quoted, in whole or in part, or otherwise referred to or used for any purpose without our prior written consent.
Yours truly,
/s/ MLT Aikins LLP
3
Exhibit 5.4
April 9, 2026
Digi Power X Inc.
110 Yonge Street, Suite 1601
Toronto, Ontario M5C 1T4
Dear Sirs/Mesdames:
| Re: | Digi Power X Inc. At-the-Market Offering Program |
We have acted as counsel to Digi Power X Inc., a company governed by the Business Corporations Act (British Columbia) (the “Issuer”), in connection with a registration statement on Form S-3 (the “Registration Statement”), filed by the Issuer with the U.S. Securities and Exchange Commission (the “Commission”) on April 9, 2026, which Registration Statement included therewith a base prospectus (the “Base Prospectus”), and a prospectus supplement to the Base Prospectus (the “Prospectus Supplement”, and together with the Base Prospectus, the “Prospectus”), and filed with the Commission pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended. The Prospectus Supplement relates to an at-the-market offering (the “Offering”) by the Issuer of such number of subordinate voting shares of the Issuer (“Shares”) having an aggregate offering price of up to US$75,000,000 to be sold pursuant to an amended and restated sales agreement dated April 9, 2026 by and between A.G.P./Alliance Global Partners, in its capacity as agent (the “Agent”), and the Issuer (the “Sales Agreement”).
For the purposes of this opinion letter, we have examined and relied upon originals or copies of the following documents (collectively, the “Corporate Documents”):
| (a) | a certificate of good standing issued by the British Columbia Registrar of Companies with respect to the Issuer dated April 9, 2026; |
| (b) | certificate of a senior officer of the Issuer dated April 9, 2026 (the “Officer’s Certificate”); |
| (c) | the certificate of incorporation and the articles of the Issuer attached to the Officer’s Certificate; and |
| (d) | certain resolutions of the Issuer’s directors relating to the Offering attached to the Officer’s Certificate. |
We have relied upon the Corporate Documents as to the matters provided for in them, without independent investigation, for purposes of providing our opinions expressed below. We have not conducted a review of the minute books of the Issuer.
In examining all documents and in providing our opinions below we have assumed that:
| (a) | all individuals had the requisite legal capacity; |
| (b) | all signatures are genuine; |
| (c) | all documents submitted to us as originals are complete and authentic and all photostatic, certified, telecopied, notarial or other copies conform to the originals; |
| (d) | all facts set forth in the official public records, certificates and documents supplied by public officials or otherwise conveyed to us by public officials are complete, true and accurate as of the date hereof; |
| (e) | the certificate of incorporation is conclusive evidence that the Issuer is incorporated under the Business Corporations Act (British Columbia); |
| (f) | all facts set forth in the certificates supplied by the respective officers and directors of the Issuer including, without limitation, the Officer’s Certificate are complete, true and accurate as of the date hereof; |
| (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 Shares; and |
| (h) | there is no non Canadian law that would affect the opinion expressed herein; |
and the Sales Agreement (i) has been duly authorized, executed and delivered by all parties thereto other than the Issuer (the “Other Parties”), and such Other Parties had the capacity to do so; (ii) constitutes a legal, valid and binding obligation of all Other Parties thereto; (iii) is enforceable in accordance with its terms against all Other Parties thereto; and (iv) is governed by the laws of the State of New York.
Our opinions set forth below are expressed only with respect to the laws of the Province of British Columbia and the laws of Canada applicable therein in effect on the date of this opinion letter. Any reference to the laws of British Columbia includes the laws of Canada that apply in British Columbia. We have no responsibility or obligation to (i) update this opinion letter, (ii) take into account or inform the addressees 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 addressees or any other person of any other change in any matter addressed in this opinion letter. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion letter to any person other than the addressees.
Whenever our opinion with respect to the existence or absence of facts or circumstances is qualified by the expression, “to our knowledge” or words to like effect, it is based solely on (i) actual knowledge of current partners and associates directly involved in the Offering learned during the course of representing the Issuer and (ii) a review of the Corporate Documents referred to above. We have not undertaken any other investigation.
Based on the above, and subject to the qualifications below, we are of the opinion that on the date hereof, the Shares, when issued, sold and delivered in the manner and for the consideration set forth in, and in accordance with the Sales Agreement and the Corporate Documents, upon payment of the consideration provided therein to the Issuer, will be validly issued as fully paid and non-assessable subordinate voting shares in the capital of the Issuer.
We hereby consent to the use of our name under the heading “Legal Matters” in the Prospectus. We also hereby consent to the filing of this opinion letter with the Commission as an exhibit to the Registration Statement and to the Issuer’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Where our opinion refers to securities to be issued as being “fully paid and non-assessable”, such opinion assumes that all required consideration (in whatever form) has or will be paid or provided and no opinion is expressed as to the adequacy of any such consideration paid or provided.
This opinion letter is solely for the benefit of the addressee and not for the benefit of any other person. It is rendered solely in connection with the Offering. It may not be quoted, in whole or in part, or otherwise referred to or used for any purpose without our prior written consent.
Yours truly,
/s/ MLT Aikins LLP
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Digi Power X Inc. of our report dated March 31, 2026, relating to the consolidated financial statements, appearing in the Annual Report on Form 10-K of Digi Power X Inc. for the year ended December 31, 2025.
We also consent to the reference to us under the caption “Experts” in each prospectus filed with this Registration Statement.
/s/ DAVIDSON & COMPANY LLP
| Chartered Professional Accountants | Vancouver, Canada |
April 9, 2026
DAVIDSON & COMPANY LLP | 1200 - 609 Granville Street PO BOX 10372, Pacific Centre Vancouver, BC V7Y 1G6 | 604 687 0947 davidson-co.com |