Filed Pursuant to Rule 424(b)(5)
File No. 333-265998
Prospectus Supplement
(To Prospectus Dated July 1, 2022)
51,450,000 Common Shares
We are offering 51,450,000 of our common shares, without par value
per share, at a price of $0.0450 per share, directly to certain institutional investors pursuant to this prospectus supplement and the
accompanying prospectus.
Our common shares and our warrants that were issued
in connection with our initial public offering (“Prior Warrants”) are listed on the Nasdaq Capital Market ( “Nasdaq”)
under the symbols “SYTA” and “SYTAW,” respectively. The common shares offered hereby will trade on the Nasdaq
under the current symbol “SYTA.” On July 10, 2023, the last reported sales price of the common shares on Nasdaq was $0.072
and the last reported sales price of the Prior Warrants was $0.05.
As of the date of this prospectus supplement, the aggregate market value
of our common shares held by non-affiliates, or our public float, was approximately $18,491,072 based on a total number of 133,943,404
common shares outstanding, of which 132,079,090 common shares were held by non-affiliates, and a price of $0.14 per share, which was the
closing price of our common shares on May 12, 2023. Pursuant to General Instruction I.B.5. of Form F-3, in no event will we sell the securities
covered hereby in a public primary offering with a value exceeding more than one-third of the aggregate market value worldwide of our
common shares held by non-affiliates of our company in any 12-month period so long as the aggregate market value of our outstanding common
shares held by non-affiliates remains below $75 million. As of the date of this prospectus we have sold $3,841,569 of securities pursuant
to General Instruction I.B.5 of Form F-3 during the prior 12-calendar month period that ends on, and includes, the date of this prospectus.
We are thus currently eligible to offer and sell an aggregate of approximately $2,322,122 of our Common Shares pursuant to General
Instruction I.B.5 of Form F-3.
On August 26, 2022 we received a letter from
the Listing Qualifications Department of The Nasdaq Stock Market LLC, notifying us that we were not in compliance with the minimum bid
price requirement set forth under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) because the closing bid price of
the Company’s common shares was below $1.00 per share for a period of 30 consecutive business days. On February 23, 2023, Nasdaq
granted our request for an additional 180-day extension to regain compliance with the Bid Price Rule by August 21, 2023. If at any time
prior to August 21, 2023, the bid price of the common shares closes at $1.00 per share or more for a minimum of 10 consecutive business
days, we will regain compliance with the Bid Price Rule. If we do not regain compliance with the Bid Price Rule during the additional
180-day extension, Nasdaq will notify us that our common shares will be delisted. In addition, On June 30, 2023, we received a letter
from the Listing Qualifications Department of Nasdaq, notifying us that we were not in compliance with the minimum bid price requirement
set forth under Nasdaq Listing Rule 5810 (the “Low Price Stocks Rule”), resulting from the fact that the closing bid price
of the Company’s common shares was below $0.10 per share for a period of 10 consecutive trading days starting on June 15, 2023.
Pursuant to Nasdaq Listing Rule 5815, the Company requested and was granted on July 6, 2023 its request for hearing from a Nasdaq Hearings
Panel to review the delisting determination made by the Nasdaq staff. The Company now has a hearing scheduled for September 7, 2023,
until which date Nasdaq has stayed the suspension and delisting action pending against the Company. The Company is currently considering
options to regain compliance with the Bid Price Rule and the Low Price Stocks Rule, including the option of effecting a reverse stock
split of our common shares. See “Risk Factors” on page S-12 for additional information.
INVESTING IN OUR COMMON SHARES INVOLVES A
HIGH DEGREE OF RISK. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING “RISK
FACTORS” ON PAGE S-12 OF THIS PROSPECTUS SUPPLEMENT, AND UNDER SIMILAR HEADINGS IN THE DOCUMENTS THAT ARE INCORPORATED
BY REFERENCE INTO THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
We have engaged Maxim Group LLC (the “Placement
Agent”) as our exclusive placement agent to use its reasonable best efforts to solicit offers to purchase the securities being offered
pursuant to this prospectus supplement and accompanying prospectus. The Placement Agent has no obligation to buy any of the securities
from us or to arrange for the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay the Placement
Agent the fees set forth in the table below assuming the issuance and sale of 51,450,000 common shares.
| |
Per common share | | |
Total | |
Public offering price per common share | |
$ | 0.0450 | | |
$ | 2,315,250.00 | |
Placement Agent fee per common share(1) | |
$ | 0.00315 | | |
$ | 162,067.50 | |
Proceeds, before expenses, to us, common shares | |
$ | 0.04185 | | |
$ | 2,153,182.50 | |
(1) |
We have agreed to pay the
Placement Agent: (i) a cash fee equal to 7.0% of the aggregate gross proceeds raised in this offering and (ii) to reimburse the Placement
Agent up to $40,000 for reasonable and documented fees and expenses of legal counsel and other actual out-of-pocket expenses. See
“Plan of Distribution” beginning on page S-31 of this prospectus supplement for additional information with respect
to the compensation we will pay the Placement Agent. |
We expect to deliver the common
shares being offered pursuant to this prospectus supplement and the accompanying prospectus to purchasers on or about July 13, 2023.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Sole Placement Agent
MAXIM GROUP LLC
The date of this prospectus supplement is July
11, 2023.
TABLE OF CONTENTS
Prospectus Supplement
Base Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part
is this prospectus supplement, which describes the specific terms of this offering of our common shares. The second part is the accompanying
prospectus, which provides more general information, some of which may not apply to this offering. The information included or incorporated
by reference in this prospectus supplement also adds to, updates and changes information contained or incorporated by reference in the
accompanying prospectus. If information included or incorporated by reference in this prospectus supplement is inconsistent with the accompanying
prospectus or the information incorporated by reference therein, then this prospectus supplement or the information incorporated by reference
in this prospectus supplement will apply and will supersede the information in the accompanying prospectus and the documents incorporated
by reference therein.
This prospectus supplement is part of a registration statement on Form
F-3 (File No. 333-265998) that we filed with the U.S. Securities and Exchange Commission (“SEC”) using a “shelf”
registration process. Under the shelf registration process, we may from time to time offer and sell any combination of the securities
described in the accompanying prospectus up to a total dollar amount of $100,000,000, of which this offering is a part. As of the date
of this prospectus supplement, we have sold $3,841,569 of securities pursuant to General Instruction I.B.5 of Form F-3 during the prior
12-calendar month period that ends on, and includes, the date of this prospectus. We are thus currently eligible to offer and sell an
aggregate of approximately $2,322,122 of our Common Shares pursuant to General Instruction I.B.5 of Form F-3.
To the extent this prospectus supplement contains
summaries of the documents referred to herein, you are directed to the actual documents for complete information. All of the summaries
are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed or will be
filed in a Report of Foreign Private Issuer on Form 6-K, or will be incorporated by reference as exhibits to the registration statement
of which this prospectus supplement forms a part, and you may obtain copies of such documents as described below in the section titled
“Where You Can Find Additional Information.”
You should rely only on the information contained
or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, and the Placement Agent has not,
authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information,
you should not rely on it. We are not making an offer to sell or soliciting an offer to buy these securities under any circumstance in
any jurisdiction where the offer or solicitation is not permitted. You should assume that the information contained in this prospectus
supplement and the accompanying prospectus is accurate only as of the date of the respective document in which the information appears,
and that any information in documents that we have incorporated by reference is accurate only as of the date of the document incorporated
by reference, regardless of the time of delivery of this prospectus supplement or any sale of a security. Our business, financial condition,
results of operations and prospects may have changed since those dates.
Unless otherwise stated in this prospectus supplement,
“Siyata,” “we,” “us,” “our,” or “Company,” refers to Siyata Mobile Inc. and
our subsidiaries. All dollar amounts in this prospectus supplement are in United States dollars.
The market data and certain other statistical
information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus are based on independent
industry publications, governmental publications, reports by market research firms or other independent sources which we have not independently
verified. Some data are also based on our good faith estimates.
The logos, and other trade names, trademarks,
and service marks of Siyata Mobile Inc. appearing in this prospectus are the property of Siyata. Other trade names, trademarks, and service
marks appearing in this prospectus are the property of their respective holders. Trade names, trademarks, and service marks contained
in this prospectus may appear without the “®” or “™” symbols. Such references are not intended to indicate,
in any way, that we, or the applicable owner or licensor, will not assert, to the fullest extent possible under applicable law, our rights
or the rights of the applicable owner or licensor to those trade names, trademarks, and service marks.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the
information incorporated by reference in this prospectus contain forward-looking statements that are based on our management’s beliefs
and assumptions and on information currently available to us. The words “believe,” “may,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,”
“would,” “project,” “plan,” “potentially,” “likely,” and similar expressions
and variations thereof are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
Those statements appear in this prospectus and the documents incorporated herein by reference, particularly in the sections titled “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and include
statements regarding the intent, belief or current expectations of our management that are subject to known and unknown risks, uncertainties
and assumptions. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of
various factors.
Forward-looking statements include, but are not
limited to, statements about:
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the size and growth potential of the markets for our products, and our ability to serve those markets; |
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the rate and degree of market acceptance of our products; |
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our ability to expand our sales organization to address effectively existing and new markets that we intend to target; |
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impact from future regulatory, judicial, and legislative changes or developments in the U.S. and foreign countries; |
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our ability to compete effectively in a competitive industry; |
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our ability to obtain funding for our operations and effectively utilize the capital raised therefrom; |
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our ability to attract collaborators and strategic partnerships; |
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our ability to meet the continued listing requirements and standards of the Nasdaq Capital Market, or Nasdaq; |
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our ability to meet our financial operating objectives; |
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the availability of, and our ability to attract, qualified employees for our business operations; |
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general business and economic conditions; |
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our ability to meet our financial obligations as they become due; |
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positive cash flows and financial viability of our operations and any new business opportunities; |
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our ability to secure intellectual property rights over our proprietary products or enter into license agreements to secure the legal use of certain patents and intellectual property; |
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our ability to be successful in new markets; |
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our ability to avoid infringement of intellectual property rights; and |
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the effects of the global COVID-19 pandemic and the war in Ukraine. |
The foregoing does
not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that
we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see “Risk
Factors,” and “Business” and “Incorporation of Certain Documents by Reference,” as well as in our Annual
Report on Form 20-F under Item 3. “Key Information – D. Risk Factors,” “Item 4. Information on the Company,”
and “Item 5. Operating and Financial Review and Prospects” for additional factors that could adversely impact our business
and financial performance.
Moreover, new risks regularly
emerge and it is not possible for our management to predict or articulate all the risks we face, nor can we assess the impact of all risks
on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any
forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the
date of this prospectus and as of the dates of the documents incorporated herein by reference. Except to the extent required by applicable
laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information,
future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus supplement and the
documents incorporated by reference herein. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described in this prospectus supplement as anticipated, believed, estimated
or expected.
Readers are urged to
carefully review and consider the various disclosures made throughout this prospectus supplement which are designed to advise interested
parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
You should not put undue
reliance on any forward-looking statements. Any forward-looking statements in this prospectus supplement are made as of the date hereof,
and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.
PROSPECTUS SUPPLEMENT SUMMARY
This summary description about us and our business
highlights selected information contained elsewhere in this prospectus supplement or the accompanying base prospectus. This summary does
not contain all of the information you should consider before deciding to invest in our securities. You should carefully read this entire
prospectus supplement and the accompanying base prospectus, including each of the documents incorporated herein or therein by reference,
before making an investment decision. You should also carefully consider the matters discussed in the section in this prospectus supplement
entitled “Risk Factors” and in the accompanying base prospectus and in other documents incorporated herein by
reference.
Corporate Overview
Siyata Mobile Inc. is a leading global developer
of innovative cellular-based communications solutions over advanced mobile networks under the Uniden® Cellular and Siyata brands to
global first responders and enterprise customers. Siyata’s three complementary product categories include rugged handheld mobile
devices and in-vehicle communications solutions designed for first responders, military, enterprise customers, commercial fleet vehicles
and industrial workers, and cellular amplifiers to boost the cellular signal inside homes, buildings and vehicles.
The Company develops, markets and sells a portfolio
of rugged handheld Push-to-Talk over Cellular (“PoC”) smartphone devices. These rugged business-to-business (“B2B”)
environments are focused on enterprise customers, first responders, construction workers, security guards, government agencies, utilities,
transportation, waste management, amusement parks and mobile workers in multiple industries.
Prior to 2021, Siyata sold rugged handsets, such
as the Uniden UR5 and Uniden UR7 only in international markets. In the second quarter of 2022, Siyata unveiled its next generation rugged
device, the SD7. The SD7 is Siyata’s first mission critical push-to-talk device (“MCPTT”) and is also the first rugged
communications solution Siyata launched in North America and is expected to launch in Europe in 2023.
Subsequent to the end of the third quarter of
2022, Siyata announced the SD7+, a single platform solution that integrates PoC and bodycam functionality.
Our second product category is purpose built in-vehicle
communication devices. In the fourth quarter of 2021, Siyata launched the VK7, a first-of-its-kind, patent-pending car kit with an integrated
10-watt speaker, a simple slide-in connection sleeve for the SD7, and an external antenna connection for connecting to a windshield or
roof mount antenna to allow for an in-vehicle experience for the user that is similar to that from a traditional land mobile radio (“LMR”)
device. The VK7 has been uniquely designed to be used with the SD7, while connecting directly into the vehicle’s power and can also
connect to a Uniden cellular amplifier for better cellular connectivity. The VK7 can also be equipped with an external remote speaker
microphone to ensure compliance with hands-free communication legislation.
The Uniden® UV350, is a
purpose built In-Vehicle communication device designed specifically for professional vehicles such as trucks, vans, buses, emergency service
vehicles and other enterprise vehicles. This platform is designed to facilitate replacement of the current in-vehicle, multi-device status-quo
with a single device that incorporates voice, PoC, data, fleet management solutions and other Android based professional applications.
The UV350 also supports Band 14 for the First Responder Network Authority, or FirstNet®, compatibility which is the U.S.
First Responders 4G/LTE network with PoC capabilities that aims to replace aging two-way radio systems currently in use.
The Uniden® UV350, is a purpose built-in vehicle communication
device designed specifically for professional vehicles such as trucks, vans, buses, emergency service vehicles and other enterprise vehicles.
This platform is designed to facilitate replacement of the current in-vehicle, multi-device status-quo with a single device that incorporates
voice, PoC, data, fleet management solutions and other Android based professional applications. The UV350 also supports Band 14 for the
First Responder Network Authority, or FirstNet®, compatibility which is the U.S. First Responders wireless network with PoC capabilities
that aims to replace aging LMR systems currently in use.
Qualifications for the UV350 In-Vehicle device with North American
carriers began with Bell Mobility, AT&T as well as at its first responder cellular network FirstNet®, with Rogers Wireless
and Verizon Wireless, and internationally with Telstra. These were major milestones for the Company following Siyata’s seven years
of experience perfecting in-vehicle cellular based technology, vehicle installations, software integration with various Push-to-Talk (“PTT”)
solutions and intensive carrier certifications.
Cellular boosters are our third product category
with approximately 30 million of these devices sold globally every year. Siyata manufactures and sells Uniden® Cellular
boosters and accessories for enterprise, first responder and consumer customers with a focus on the North America markets. Cellular communication
provides a robust, secure environment not just for remote workers, in-home and in-vehicles; but also for restaurant patrons who wish to
download menus; for patients at pharmacies who need to verify identity and download scripts; for remote workers who require strong clear
cellular signals; and for first responders where connectivity literally means the difference between life and death - just to name a few
examples. The vehicle vertical in this portfolio complements Siyata’s in-vehicle and rugged handheld smartphones as these sales
can be bundled through the Company’s existing sales channels.
We offer a full line of cellular boosters, to
boost cellular reception, under the brand name Uniden®. We have entered into a partnership whereby Uniden America Corporation,
the North American subsidiary of Japan-based Uniden Corporation, has granted the exclusive license to us to market cellular signal boosters
under the Uniden® brand name within the U.S. and Canada, on a rolling three year contract term, with the current extension
expiring December 31, 2031 unless sooner terminated pursuant to the terms of this Agreement. As a world-wide leader in wireless communications,
Uniden America Corporation manufactures and markets wireless consumer electronic products. Based in Fort Worth, Texas, Uniden sells its
products through dealers and distributors throughout North, Central and South America. Uniden Cellular booster kits solve issues of poor
reception, dropped calls, lost data and transmission quality issues that users routinely experience on every cellular network. These easy-to-install
cellular booster kits are designed for homes, cabins, offices, and buildings to improve the cellular signal reception indoors, allowing
people to use their cellular phones indoors where they previously could not do so. We also offer models designed for vehicles, both wired
and wireless boosters, to improve the cellular reception inside a vehicle that is driving in a weak cellular signal area. Uniden cellular
signal boosters offer kits designed to offer cellphone coverage for difference distances, including kits for a small area of 1 or 2 rooms,
and more expansive solutions that will cover over 100,000 sq. ft. Our cellular signal boosters are carrier agnostic to ensure the best
signal integrity, supporting 2G, 3G, 4G and soon 5G (in development) technologies on all carriers operating in North America.
The aforementioned portfolio of solutions offers
the benefits of PoC without any of the difficulties managing the current generation of rugged smart/feature phones and is ideally suited
as a perfect upgrade from LMR used for generations. LMR has a significant number of limitations, including network incompatibility, limited
coverage areas, and restricted functionality that leave a huge need for a unified network and platform. Siyata’s innovative PoC
product lines are helping to service the generational shift from LMR to PoC. While LMR licensing activity is near historical lows, the
PoC is growing at a rapid pace. According to Allied Market Research, the PoC market is expected to grow at an estimated 9.4% compound
annual growth rate (“CAGR”) to approximately $6.96 billion by 2027.
Our Customers and Channels
The North American Tier 1 cellular carriers that
Siyata is working with have large scale distribution and sales channels. With an estimated 25 million commercial vehicles including 7.0
million first responder vehicles, the Company sees the North American market as its largest opportunity with a total addressable market
over $19 billion. These Tier 1 cellular carriers have a keen interest in launching the UV350 as it allows for new SIM card activations
in commercial vehicles and increased ARPU from existing customers with corporate and first responder fleets while targeting new customers
with a unique, dedicated, multi-purpose in-vehicle IoT smartphone.
In addition, our rugged handsets are targeted
to approximately 47 million enterprise task and public sector workers across North America including construction, transport& logistics,
manufacturing, energy & utility, public safety and federal government. As of December 31, 2022, Siyata had secured North American
wireless carrier approvals of the SD7 Handset for use on their networks from AT&T, FirstNet, Verizon, and Bell Mobility. During 2023,
Siyata has since added T-Mobile and US Cellular to its list of North American wireless carriers who have approved SD7 for use on their
networks. Internationally, Telstra from Australia has also approved SD7 for use on their network during 2023.
AT&T, our largest channel partner, represented
28.1% of our revenues in 2022. AT&T did not enter into a master services agreement with us, but rather, enters into standard purchase
order forms on a per order basis. We do not obligate AT&T to fulfill any required minimum purchase orders. Our typical purchase order
contracts with AT&T involve standard warranties and indemnification, insurance requirement and delivery terms.
With an estimated 17 million commercial vehicles
as well as 3.5 million first responder vehicles, we view the U.S. market as our largest opportunity with, according to the U.S. Department
of Transportation, an estimated total addressable market of over $17 billion. The Tier 1 cellular carriers that we work with have expressed
interest in marketing and selling the UV350 as it would allow for new SIM card activations in commercial vehicles and increased average
revenue per user from existing customers with corporate and first responder fleets while targeting new customers with a unique, dedicated,
multi-purpose in-vehicle smartphone.
Our Competitive Strengths
We believe that the following competitive strengths
contribute to our success and differentiate us from our competitors:
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Our innovative technology solutions and integration approach with minimal known competition. |
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Our reputation and recognition achieved from our previous success in this space. |
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Our experienced management team. |
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Our relationships and device approvals with leading North American wireless networks. |
Our Growth Strategies
We intend to further grow our business by pursuing
the following strategies:
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Ramp up sales with our North American and global cellular carrier partners. |
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Entering new customer bases and markets. |
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Implementing effective resources management to improve operational efficiency and boost core competency. |
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Designing new products and improving our existing products for our current and future customer base. |
Our Challenges
We face challenges, risks and uncertainties in
realizing our business objectives and executing our strategies, including those relating to our ability to:
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Grow our market share in the United States which is a large-scale market for us. |
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Navigate in the fast-changing regulatory environment. |
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Maintain and improve our relationship with leading cellular carriers and business partners. |
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Recruit and retain qualified personnel. |
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Manage our growth effectively and efficiently. |
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Enhance our product lines in a cost-effective manner. |
Recent Developments
Changes in the Company’s Accountants.
On May 24, 2022, we received a letter from Davidson & Company LLP (“Davidson”) that stated that Davidson did not wish
to be reappointed as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022. Davidson
ceased to serve as the Company’s independent registered accounting firm as of May 24, 2022.
On May 24, 2022, management of the Company notified
Friedman LLP (“Friedman”) that Friedman had been approved by the Company’s audit committee (“Audit Committee”)
of the board of directors and the board of directors as the Company’s independent registered public accounting firm for the fiscal
year ended December 31, 2022. Friedman LLP combined with Marcum LLP effective September 1, 2022 (“Marcum”).
As of March 21, 2023, Marcum notified the
Company that Marcum had resigned as the Company’s independent certified public accounting firm effective as of March 21, 2023.
Marcum’s resignation as the Company’s independent registered public accounting firm was accepted by the Audit Committee of
the Board of Directors of the Company as of March 21, 2023.
Marcum served as the Company’s independent
registered public accounting firm since May 24, 2022. Marcum did not audit the Company’s financial statements for any year and did
not perform a review of the Company’s interim financial statements for the nine months ended September 30, 2022 but did review the
Company’s interim financial statements for the six months ended June 30, 2022.
On March 21, 2023, the Company engaged Barzily
& Co. (“Barzily”) as its new independent registered public accountant for the fiscal year ending December 31, 2022. This
decision was approved by the Audit Committee of the Board in accordance with the authority of the Audit Committee as specified in its
Charter. Barzily is registered with the Canadian Public Accountability Board, which like the Public Company Accounting Oversight Board
(“PCAOB”) in the United States, oversees public accounting firms that audit Canadian reporting issuers.
Recent Offerings.
On June 27, 2023, the Company entered into securities purchase agreement
dated as of June 26, 2023 with a certain institutional investor, to purchase an aggregate of 50,000,000 of the Company’s common
shares, no par value per share, at a purchase price of $0.045 per common shares (the “June Public Offering”). The June Public
Offering resulted in gross proceeds to the Company of $2,250,000 before deducting the fees payable to the placement agent for the offering,
and certain related offering expenses.
On January 18, 2023, the Company entered into warrant exercise agreements
with fourteen existing accredited investors to exercise certain outstanding warrants to purchase up to an aggregate of 18,042,857 of the
Company’s common shares. The gross proceeds to the Company from the exercise totaled approximately $3,608,571, prior to deducting
warrant inducement agent fees and estimated offering expenses. In consideration for the immediate exercise of the existing warrants for
cash, the exercising holders received new unregistered warrants to purchase up to an aggregate of 18,042,857 common shares (equal to 100%
of the common shares issued in connection with the Exercise) in a private placement pursuant to Section 4(a)(2) of the Securities Act.
In connection with the exercise, the Company also agreed to reduce the exercise price of the existing warrants from $0.23 to $0.20 per
share. The warrant exercise agreements and the new warrants each include a beneficial ownership limitation that prevents the warrant holder
from owning more than 4.99% (which may be increased to 9.99% in accordance with the terms of the new warrants) of the Company’s
outstanding common shares at any time. The new warrants are exercisable immediately upon issuance at a cash exercise price of $0.20 per
share and have a term of exercise equal to five years. However, the holder of the new warrant may also effect an “alternative cashless
exercise” on or after the earlier of: (i) one hundred and eighty (180) day anniversary of the initial exercise date (January 19,
2023) or (ii) the day after effectiveness of the registration statement of which this prospectus is a part. In such event, the aggregate
number of common shares issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing to effect an
alternative cashless exercise will equal the product of (x) the aggregate number of common shares that would be issuable upon exercise
of the new warrant in accordance with the terms of the new warrant if such exercise were by means of a cash exercise rather than a cashless
exercise and (y) 1.0, which would result in an effective exercise price of $0.00 at such time. In connection with the exercise, the Company
reduced the exercise price of 2,989,130 of certain of its remaining unexercised common share purchase warrants from $0.23 per common share
to an exercise price of $0.20 per common share, which warrants were subsequently repriced to $0.00 in April, 2023 as the cashless exercise
price of the new warrants is triggered. However, previously issued warrants: (i) for 1,805,585 common shares that currently trade on the
Nasdaq Capital Market under the symbol “SYTAW” that have an exercise price of $6.85 per share; (ii) for 1,294,500 common shares
that were issued in a private transaction that have an exercise price of $11.50 per share; and (iii) for 9,999,999 common shares that
were issued in a private transaction that have an exercise price of $2.30 per share are not required by their terms to be repriced.
Subsequent to March 31, 2023, 21,031,987 cashless
warrants were exercised in exchange for a total of 21,031,987 common shares issued by the Company. Since no cash was used for the exercise
of such warrants, the Company received no proceeds from such exercise.
Going Concern. Our auditor has included
a “going concern” explanatory paragraph in its audit report on our consolidated financial statements for the fiscal year ended
December 31, 2022, expressing substantial doubt about our ability to continue as an ongoing business for the next twelve months. Our consolidated
financial statements do not include any adjustments that may result from the outcome of this uncertainty. If we cannot secure the financing
needed to continue as a viable business, our shareholders may lose some or all of their investment in us.
Nasdaq Delisting Letters. On September
1, 2022, we announced that the Company had received a notification letter dated August 26, 2022 from the Listing Qualifications Department
of The Nasdaq Stock Market LLC (“Nasdaq”), notifying the Company that it is currently not in compliance with the minimum bid
price requirement set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”), resulting from the fact that
the closing bid price of the Company’s common shares was below $1.00 per share for a period of thirty consecutive business days.
Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company had a compliance
period of 180 calendar days, or until February 22, 2023 (the “Compliance Period”), to regain compliance with the Nasdaq’s
Minimum Bid Price Rule. The Company did not regain compliance with the minimum $1.00 bid price per share requirement during the first
180-calendar-day Compliance Period and submitted a written request to the Nasdaq to afford it an additional 180-day compliance period
to cure the deficiency. On February 23, 2023, the Company received written notification from the Listing Qualifications Department of
Nasdaq granting the Company’s request for a 180-day extension to regain compliance with Nasdaq’s Minimum Bid Price Rule. The
Company now has until August 21, 2023 to meet this requirement. If at any time prior to August 21, 2023, the bid price of the Company’s
common shares closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Company will regain compliance with
the Minimum Bid Price Rule. If the Company does not regain compliance with the Minimum Bid Price Rule during the additional 180-day extension,
Nasdaq will provide written notification to the Company that its common shares will be delisted. At that time, the Company may appeal
the relevant delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.
However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the hearings panel, that
such appeal would be successful. Nor is there any assurance that the Company would obtain a further extension of time to meet this requirement.
The Company intends to actively monitor the closing bid price of its common shares and may, if appropriate, consider implementing available
options to regain compliance with the Minimum Bid Price Rule, including effecting a reverse stock split of our common shares.
Further, we received a notification letter dated
June 30, 2023 from the Listing Qualifications Department of Nasdaq, notifying us that we were currently not in compliance with the minimum
bid price requirement set forth under Nasdaq Listing Rule 5810 (the “Low Price Stocks Rule”), resulting from the fact that
the closing bid price of the Company’s common shares was below $0.10 per share for a period of 10 consecutive trading days starting
on June 15, 2023.
Pursuant to Nasdaq Listing Rule 5815, we requested and were granted
on July 6, 2023 our request for hearing from a Nasdaq Hearings Panel to review the delisting determination made by the Nasdaq staff. We
now have a hearing scheduled for September 7, 2023, until which date Nasdaq has stayed its suspension and delisting action pending against
the Company. There can be no assurance that Company’s appeal to Nasdaq’s delisting determination would be successful. The
Company intends to actively monitor the closing bid price of its common shares and may, if appropriate, consider implementing available
options to regain compliance with the Low Price Stocks Rule, including effecting a reverse stock split of our common shares.
British Columbia Securities Commission Cease
Trade Order. On April 6, 2023, the British Columbia Securities Commission (“BCSC”) issued a cease trade order (the
“April 2023 Order”) in respect of each of the Company’s securities as a result of the Company’s failure to file
its December 31, 2022, annual audited financial statements, management’s discussion and analysis, annual information form, and certification
for the annual filings in Canada. The Company had also received a letter dated May 17, 2023 from the BCSC, noting Siyata’s failure
to file its interim financial statements and management’s discussion and analysis for the fiscal quarter ended March 31, 2023 and
pay the required filing fee, and requesting Siyata to correct the deficiencies by filing the required materials. As of May 25, 2023, the
Company had filed the outstanding continuous disclosure documents required under the securities legislation of British Columbia. The April
2023 Order did not affect the trading of Siyata’s common shares or prior warrants on the Nasdaq Capital Market. The April 2023 Order
was revoked by the BCSC as of May 25, 2023 and, as a result of the revocation of the April 2023 Order, the Company’s shares are
no longer subject to a cease trade order.
Recent Marketing Milestones.
On January 9, 2023, the Company announced that
T-Mobile US, Inc. is expected to launch Siyata’s rugged SD7 device onto T-Mobile’s United States IoT network in the first
quarter 2023. On January 18, 2023, the Company announced that it has received follow-on orders from an existing customer, a leading Saudi
Arabian cellular carrier, for its Uniden® UV350, a 4G/LTE all-in-one in-vehicle communication device.
On January 23, 2023, the Company announced that
it has received an order for its next-generation mission critical push-to-talk solution, which includes its SD7 device and related accessories,
from a multi-billion-dollar, integrated resort and residential property development located in The Bahamas.
On February 21, 2023, the Company announced that
it had received an order for $750,000 for its next-generation MCPTT (mission critical push-to-talk) solution to equip an independent emergency
management service provider with the Company’s SD7 devices and related accessories.
On February 23, 2023, the Company announced that
it had received written notification from the Listing Qualifications Department of Nasdaq granting the Company’s request for a 180-day
extension to regain compliance with Nasdaq’s minimum bid price requirement. The Company now has until August 21, 2023 to meet that
requirement. See above “-Nasdaq Delisting Letter” and “Risk Factors - We could lose our listing on the Nasdaq Capital
Market if the closing bid price of our common shares does not return to above $1.00 for ten consecutive days during the 180 days ending
August 21, 2023. The loss of the Nasdaq listing would make our common shares significantly less liquid and would affect their value.”
On February 27, 2023, the Company announced the
launch of the Siyata T600 Cellular Booster for T-Mobile 5G enterprise customers.
On March 6, 2023, the Company announced that it
had successfully donated and deployed its mission critical push-to-talk solution for security and volunteer personnel at the 2023 Special
Olympics New York Winter Games in Syracuse, New York.
On March 13, 2023, the Company announced that
will host an exhibitor’s booth at the International Wireless Communications Expo 2023 showcasing its new SD7 Mission Critical Push-To-Talk
solution, the SD7+ MCPTT solution with built in Body Camera and accessories from March 27-30 in Booth 2125, North Hall, at the Las Vegas
Convention Center.
On March 20, 2023, the Company announced the successful
certification and approval of its mission-critical PoC SD7 solution by Telstra, Australia’s largest wireless carrier who is anticipated
to begin sales of the SD7 to its enterprise and government customers in the second quarter of 2023.
On March 27, 2023, the Company announced that
it is collaborating with CrisisGo, Inc. (“CrisisGo”), the provider of the CrisisGo Panic app, an incident management platform
for first responders, to introduce next generation, cellular-based paging services for use by emergency response personnel.
On April 3, 2027, the Company announced that it
received its largest order to date for the SD7 handset and accessories from a single customer in the United States education market.
On April 17, 2023, the Company announced that
Entropia Investments BV, a leading provider of secure mobile mission-critical communications services to a wide range of end-users in
the Netherlands, northern Belgium and the United Kingdom, is to commence selling Siyata’s mission-critical PoC SD7 solution in the
second quarter of 2023.
On April 24, 2023, the Company announced that
Two Way Direct, Inc., a reseller of two-way radios and push-to-talk over cellular, is now a distributor of Siyata’s mission-critical
PoC (MCPTT) SD7 solution and its broad range of accessories.
On June 1, 2023, the Company announced that it
received an order for its UV350 In Vehicle Devices and ‘Siyata Real Time View,’ the Company’s newest product, valued
at over $1.2 million.
On June 5, 2023, the Company announced that it
received new orders for its SD7 Handsets and VK7 Vehicle Kits totaling more than $400,000 in aggregate.
On June 12, 2023, the Company announced that Minnesota
Coaches, Inc., a privately-held motor coach and school bus transportation company, has taken delivery of its first SD7 Handsets and VK7
Vehicle Kits and the Company expects Minnesota Coaches to deploy its SD7 Handset and VK7 Vehicle Kit in the balance of their fleet of
over 900 vehicles.
On June 14, 2023, the Company announced that
it launched its latest product, the Siyata Mobile Command Center, an all-in-one, mobile communications solution with built-in redundancy
primarily for providers of Emergency Management Services that need to set up a mobile telecommunications command center in the field.
On June 15, 2023, the Company announced that it
showcased its SD7 Handset and its VK7 Vehicle Kit at the Minnesota School Bus Operators Association’s (“MSBOA”) Annual
Summer Conference June 19–21. The conference was held at the Arrowwood Resort & Event Center in Alexandria, Minnesota.
On June 20, 2023, the Company announced that Mobile
Tornado Group Plc (AIM: MBT) (“Mobile Tornado”), a leading provider of critical communications solutions for Tier 1 Mobile
operators, will offer its robust Push-to-Talk application on Company’s SD7 Handset.
On June 21, 2023, the Company announced that it
will host exhibitor’s booth #105 at NASRO 2023, a National School Safety Conference, on June 28 – June 29, 2023 at the JW
Marriott Hotel in Indianapolis, Indiana.
On June 22, 2023, the Company announced that it
had received new orders during the second quarter 2023 in addition to orders previously announced on June 5, 2023, for its SD7 Handsets
and VK7 Vehicle Kits totaling approximately $600,000, in aggregate revenue, from customers of leading cellular carriers.
On July 6, 2023, the Company announced that it
has secured its largest SD7 order ever in the Company’s history from a single customer, valued at approximately $1.4 million.
Implications of Our Being an “Emerging
Growth Company”
As a company with less than $7.5 million in revenue
during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups
Act of 2012, or the JOBS Act. An “emerging growth company” may take advantage of reduced reporting requirements that are
otherwise applicable to larger public companies. In particular, as an emerging growth company, we:
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may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations, or “MD&A;” |
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are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis;” |
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are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; |
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are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency” and “say-on-golden-parachute” votes); |
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are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and chief executive officer pay ratio disclosure; |
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are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and |
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will not be required to conduct an evaluation of our internal control over financial reporting. |
We intend to take advantage of all of these reduced
reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards
under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to
those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107
of the JOBS Act.
Under the JOBS Act, we may take advantage of the
above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The
JOBS Act provides that we would cease to be an “emerging growth company” at the end of the fiscal year in which the fifth
anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933,
as amended, (the “Securities Act”), occurred, if we have more than $1.235 billion in annual revenues, have more than $700
million in market value of our common shares held by non-affiliates, or issue more than $1.0 billion in principal amount of non-convertible
debt over a three-year period.
Foreign Private Issuer Status
We are a foreign private issuer within the meaning
of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, we are exempt from certain
provisions applicable to United States domestic public companies. For example:
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we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; |
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for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
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we are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
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we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
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we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and |
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we are not required to comply with Section 16 of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short-swing” trading transaction. |
Annual General and Special Meeting of Shareholders
Promptly after the closing of this offering, the Company
will hold an annual general and special meeting of its shareholders, or the Annual Meeting, to consider the approval of amendments to
the Company’s articles of association, as amended (the “Charter”), to effect a reverse stock split of the Company’s
common shares, or the Reverse Stock Split, within a range of 1 and 120 common shares, with the final ratio and the implementation and
timing of such Reverse Stock Split to be determined in the discretion of our board of directors. The Annual Meeting is currently scheduled
for August 3, 2023, and shareholders as of June 28, 2023, the record date for the Annual Meeting (the “Record Date”), are
entitled to notice of and to vote at the Annual Meeting. The common shares purchased in this offering will not be outstanding and thus
will not be entitled vote at the Annual Meeting.
The approval of the amendment to the Charter
to effect the Reverse Stock Split will require the affirmative votes of a majority of the combined voting power of the outstanding shares
of common shares, voting together, present in person or represented by proxy and entitled to vote on the proposal. The holders of common
shares have the right to cast one (1) vote per share of common share on each of these proposals. Therefore, the holders of a significant
portion of the common shares outstanding must vote their shares at the Annual Meeting in order for these proposals to pass.
Corporate Information
We are organized as a corporation under the laws
of British Columbia, Canada, and maintain our principal place of business at 1751 Richardson Street, Suite #2207, Montreal, Quebec Canada
H3K-1G6. The registered and records office is located at 200 — 885 West Georgia Street, Vancouver, British Columbia V6C 3E8,
Canada. Our telephone number is (514) 500-1181 and our website is located on the internet at https://www.siyatamobile.com.
Information contained on our website does not constitute part of this prospectus supplement or our base prospectus.
The Company was incorporated on October 15,
1986 as Big Rock Gold Ltd. as a corporation under the Company Act of British Columbia. On April 5, 1988, the Company changed
its name to International Cruiseshipcenters Corp. On June 24,1991, the Company changed its name to Riley Resources Ltd. Effective
January 23, 1998, the Company consolidated its share capital on an eight-to-one basis and changed its name to International Riley
Resources Ltd. Effective November 22, 2001, the Company consolidated its share capital on a five-to-one basis and changed its name
to Wind River Resources Ltd. On January 3, 2008, the Company changed its name to Teslin River Resources Corp.
On July 24, 2015, Teslin River Resources
Corp, completed a reverse acquisition by way of a three-cornered amalgamation, pursuant to which the Company acquired certain telecom
operations of an Israel-based cellular technology company and changed its name to Siyata Mobile Inc.
On June 7, 2016, the Company acquired all
of the issued and outstanding shares of Signifi Mobile Inc. (“Signifi”).
In March 2021, the Company acquired, through
a wholly owned subsidiary formed by Signifi, all the outstanding units of Clear RF LLC (“Clear RF”).
The Company was registered with the TSXV under
the symbol SIM, commenced trading on OTCQX under the symbol SYATF from May 11, 2017 until September 25, 2020, at which time
the Company’s common shares were listed only on the Nasdaq Capital Market.
The following diagram illustrates our corporate
structure as of the date of this prospectus supplement:
Risks Affecting Our Company
In evaluating an investment in our securities,
you should carefully read this prospectus supplement and especially consider the factors incorporated by reference in the sections titled
“Risk Factors” commencing on page S-12 of this prospectus supplement and in our base prospectus and the Annual Report
incorporated by reference herein.
THE OFFERING
Issuer: |
Siyata Mobile Inc., a British Columbia (Canada) corporation. |
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Common Shares Offered: |
51,450,000 common shares. |
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Public Offering Price: |
$0.0450 per common share. |
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Common Shares Outstanding
Immediately Before This
Offering: |
133,943,404 common shares. |
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Common Shares to Be
Outstanding Immediately
Following This Offering: |
185,393,404 common shares(1). |
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Use of Proceeds: |
We
intend to use the net proceeds from the sale of the common stock offered hereby for working capital and other general corporate purposes.
See the section titled “Use of Proceeds” on page S-19. |
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Risk Factors: |
See
the sections titled “Risk Factors” commencing on page S-12 of this prospectus supplement and in our base prospectus
and the Annual Report incorporated by reference herein for a discussion of factors you should consider carefully before deciding
to invest in our common shares. |
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Listing: |
Our common shares are listed on the Nasdaq Capital Market under the symbol “SYTA.” |
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Transfer Agent: |
Computershare Inc. is the registrar and transfer agent of our common shares. |
(1) |
The number of shares of our common shares to be outstanding after this offering is based on 133,943,404 common shares outstanding, assumes 51,450,000 common shares are sold in this offering and excludes: |
| ● | 1,506,138
common shares issuable upon the exercise of stock options outstanding under our 2016 Stock Option Plan, as amended, with a weighted-average
exercise price of $3.53 per share; |
| ● | 3,165,000
common shares issuable upon the exercise of restricted share units outstanding under the 2016 Stock Option Plan, as amended; |
| ● | 25,943,282 common shares reserved for future issuance under our 2016 Stock
Option Plan, as amended; |
| ● | 13,100,084
common shares issuable upon the exercise of outstanding warrants with a weighted average exercise price of $3.84 per share; and |
| ● | 931,507
common shares issuable upon the exercise of outstanding investment banker’s warrants with a weighted average exercise price of
$4.87 per share. |
RISK FACTORS
An investment in our securities involves a
high degree of risk. Before investing in our common shares, you should carefully consider the risk factors set forth below and those described
under “Risk Factors” in the documents incorporated by reference herein, including in our most recent Annual Report on Form
20-F filed with the SEC, together with the other information included in this prospectus supplement and incorporated by reference herein
from our filings with the SEC. If any of such risks or uncertainties occur, our business, financial condition, and operating results could
be materially and adversely affected. Additional risks and uncertainties not currently known to us or that we currently deem immaterial
also may materially and adversely affect our business operations. As a result, the trading price of our common shares could decline and
you could lose all or a part of your investment.
We expect that the consummation of this
offering could cause the price of our common shares to decline.
In this offering, are offering 51,450,000 of our common shares at a
price per common share of $0.0450. We cannot predict the effect, if any, that market sales of those common shares or the availability
of those common shares for sale will have on the market price of our common shares. Any decline in the price of our common shares will
also have a negative effect on the price in the market of our Prior Warrants.
The common shares offered in the offering may
be resold in the public market immediately without restriction, unless purchased by our “affiliates” as that term is defined
in Rule 144 under the Securities Act, which may be resold only if registered under the Securities Act or in accordance with the requirements
of Rule 144 or another applicable exemption from the registration requirements of the Securities Act. common shares held by our directors
and executive officers will be subject to the lock-up agreements described in the “Plan of Distribution” section of
this prospectus supplement. If, after the period during which such lock-up agreements restrict sales of the our common shares or if the
Placement Agent waives the restrictions set forth therein (which may occur at any time), one or more of these securityholders sell substantial
amounts of common shares in the public market, or the market perceives that such sales may occur, the market price of the common shares
and our ability to raise capital through an issue of equity securities in the future could be adversely affected.
Rule 144 sales in the future may have a
depressive effect on our share price.
All of the outstanding common shares held by the
present officers, directors, and affiliate shareholders are “restricted securities” within the meaning of Rule 144 under the
Securities Act of 1933, as amended, or the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective
registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act
and as required under applicable state securities laws. Rule 144 provides in essence that a person who is an affiliate or officer or director
who has held restricted securities for six months may, under certain conditions, sell every three months, in brokerage transactions, a
number of shares that does not exceed the greater of 1.0% of a company’s outstanding common shares. There is no limitation on the
number of restricted securities that may be sold by a non-affiliate after the owner has held the restricted securities for a period of
six months if our company is a current reporting company under the Exchange Act. A sale under Rule 144 or under any other exemption from
the Securities Act, if available, or pursuant to subsequent registration of common shares of present shareholders, may have a depressive
effect upon the price of the common shares in any market that may develop.
Outstanding warrants
and future sales of our common shares may further dilute the common shares and adversely impact the price of our common shares.
As of July 11, 2023, we had 133,943,404 common
shares issued and outstanding. As of July 11, 2023, up to an additional 13,100,084 common shares underlying outstanding warrants that
have been registered with the SEC for resale are unrestricted and freely tradeable. We also have other outstanding unexercised investment
banker’s warrants to purchase 931,507 common shares as of July 11, 2023 that expire between June 30, 2024 and March 8, 2027. If
the holder of our free trading shares wanted to sell these shares, there might not be enough purchasers to maintain the market price of
our common shares on the date of such sales. Any such sales, or the fear of such sales, could substantially decrease the market price
of our common shares and the value of your investment.
You may experience future dilution as a
result of future equity offerings.
In order to raise additional capital, we may in
the future offer additional common shares or other securities convertible into or exchangeable for our common shares that could result
in further dilution to the investor purchasing our common shares in this offering or result in downward pressure on the price of our common
shares. We may sell our common shares or other securities in any other offering at prices that are higher or lower than the prices paid
by the investor in this offering, and the investor purchasing shares or other securities in the future could have rights superior to existing
shareholders. Moreover, to the extent that we issue options or warrants to purchase, or securities convertible into or exchangeable for,
our common shares in the future and those options, warrants or other securities are exercised, converted or exchanged, stockholders may
experience further dilution.
The trading price of our common shares has
been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of
which are beyond our control.
Our share price is highly volatile. During the
period from January 1, 2023 to July 11, 2023, the closing price of our common shares ranged from a high of $0.26 per share to a low of
$0.054 per share. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance
of particular companies. As a result of this volatility, you may not be able to sell your common shares at or above the public offering
price and you may lose some or all of your investment.
Our management will have broad discretion
over the use of the proceeds we receive from the sale our securities pursuant to this prospectus supplement and might not apply the proceeds
in ways that increase the value of your investment.
Our management will have broad discretion to use
the net proceeds from the offering, and you will be relying on the judgment of our management regarding the application of these proceeds.
Except as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you,
the net proceeds received by us from our sale of the securities described in this prospectus supplement will be added to our general funds
and will be used as described under “Use of Proceeds” herein. Our management might not apply the net proceeds from
offerings of our securities in ways that increase the value of your investment and might not be able to yield a significant return, if
any, on any investment of such net proceeds. You may not have the opportunity to influence our decisions on how to use such proceeds.
If we are not able
to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our common shares and Prior Warrants.
In order to maintain
the listing of our common shares and Prior Warrants on the Nasdaq Capital Market, we must satisfy minimum financial and other continued
listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’
equity, minimum share price, and certain corporate governance requirements. There can be no assurances that we will be able to comply
with such applicable listing standards.
On August 26, 2022 we received a letter from the Listing Qualifications
Department of The Nasdaq Stock Market LLC, notifying us that we were not in compliance with the minimum bid price requirement set forth
under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), resulting from the fact that the closing bid price of the Company’s
common shares was below $1.00 per share for a period of 30 consecutive business days. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we
were given a period of 180 calendar days, or until February 22, 2023 (the “Compliance Period”), to regain compliance with
Nasdaq’s minimum bid price requirement. We did not regain compliance by such date and submitted a written request to the Nasdaq
to afford us an additional 180-day compliance period to cure the deficiency. On February 23, 2023, we received written notification from
the Listing Qualifications Department of Nasdaq granting our request for an additional 180-day extension to regain compliance with Nasdaq’s
minimum bid price requirement until August 21, 2023. If at any time prior to August 21, 2023, the bid price of the common shares closes
at $1.00 per share or more for a minimum of 10 consecutive business days, we will regain compliance with the Bid Price Rule. If we do
not regain compliance with the Bid Price Rule during the additional 180-day extension, Nasdaq will notify us that our common shares will
be delisted. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable
Nasdaq Listing Rules. However, there can be no assurance that, if we do appeal the delisting determination by Nasdaq to the hearings panel,
that such appeal would be successful. We intend to actively monitor the closing bid price of our common shares and may, if appropriate,
consider implementing available options to regain compliance with the Bid Price Rule under the Nasdaq Listing Rules, including effecting
a reverse stock split of our common shares.
Nasdaq’s extension
notice has no immediate effect on the listing or trading of the common shares, which will continue to trade on the Nasdaq Capital Market
under the symbol “SYTA.”
Further, on June 30, 2023, we received a notification letter dated
June 30, 2023 from the Listing Qualifications Department of Nasdaq, notifying us that we were currently not in compliance with the minimum
bid price requirement set forth under Nasdaq Listing Rule 5810 (the “Low Price Stocks Rule”), resulting from the fact that
the closing bid price of the Company’s common shares was below $0.10 per share for a period of 10 consecutive trading days starting
on June 15, 2023. Pursuant to Nasdaq Listing Rule 5815, we requested and were granted on July 6, 2023 our request for hearing from a Nasdaq
Hearings Panel to review the delisting determination made by the Nasdaq staff. The Company now has a hearing scheduled for September 7,
2023, until which date Nasdaq has stayed the suspension and delisting action pending against the Company. The Company intends to actively
monitor the closing bid price of its common shares and may, if appropriate, consider implementing available options to regain compliance
with the Low Price Stocks Rule, including effecting a reverse stock split of our common shares.
If the common shares
are not listed on Nasdaq at any time after this offering, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities; |
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a determination that the common shares are a “penny stock” which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for the common shares; |
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a limited amount of news and analyst coverage for our Company; and |
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a decreased ability to issue additional securities or obtain additional financing in the future. |
Upon delisting from the Nasdaq Capital Market,
our common shares would be traded over-the-counter inter-dealer quotation system, more commonly known as the OTC. OTC transactions involve
risks in addition to those associated with transactions in securities traded on the securities exchanges, such as the Nasdaq Capital Market,
or Exchange-listed Stocks. Many OTC stocks trade less frequently and in smaller volumes than Exchange-listed Stocks. Accordingly, our
stock would be less liquid than it would be otherwise. Also, the values of OTC stocks are often more volatile than Exchange-listed Stocks.
Additionally, institutional investors are usually prohibited from investing in OTC stocks, and it might be more challenging to raise capital
when needed.
In addition, if our common shares are delisted,
your ability to transfer or sell your common shares may be limited and the value of those securities will be materially adversely affected.
If our common shares become subject to the
penny stock rules, it may be more difficult to sell our common shares.
The Securities and Exchange Commission (“SEC”
or the “Commission”) has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.
Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities
exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or system). The OTC Bulletin Board does not meet such requirements
and if the price of our common shares is less than $5.00 and our common shares are no longer listed on a national securities exchange
such as Nasdaq, our stock may be deemed a penny stock. The penny stock rules require a broker-dealer, at least two business days prior
to a transaction in a penny stock not otherwise exempt from those rules, to deliver to the customer a standardized risk disclosure document
containing specified information and to obtain from the customer a signed and dated acknowledgment of receipt of that document. In addition,
the penny stock rules require that prior to effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive: (i) the purchaser’s
written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks;
and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the
trading activity in the secondary market for our common shares, and therefore shareholders may have difficulty selling their shares.
Because we are
a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have
less protection than you would have if we were a domestic issuer.
Nasdaq Listing Rules
require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however,
we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above
requirement within one year of listing. The corporate governance practice in our home country does not require a majority of our board
to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer
board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as
a result. In addition, Nasdaq Listing Rules also require foreign private issuers to have a compensation committee, a nominating/corporate
governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign
private issuer, are not subject to these requirements. Nasdaq Listing Rules may require shareholder approval for certain corporate matters,
such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those
plans, and certain common share issuances. We intend to comply with the requirements of Nasdaq Listing Rules in determining whether shareholder
approval is required on such matters and to appoint a nominating and corporate governance committee. We may, however, consider following
home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain corporate governance standards which
may afford less protection to investors.
We may issue additional debt and equity
securities, which are senior to our common shares as to distributions and in liquidation, which could materially adversely affect the
market price of our common shares.
In the future, we may attempt to increase our
capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing
debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares.
In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before
distributions to our shareholders.
Any preferred securities, if issued by our company,
may have a preference with respect to distributions and upon liquidation, which could further limit our ability to make distributions
to our common shareholders. Because our decision to incur debt and issue securities in our future offerings will depend on market conditions
and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financing.
Further, market conditions could require us to
accept less favorable terms for the issuance of our securities in the future. Thus, you will bear the risk of our future offerings reducing
the value of your common shares and diluting your interest in us. In addition, we can change our leverage strategy from time to time without
approval of holders of our common shares, which could materially adversely affect the market share price of our common shares.
If we fail to file our financial disclosures
with the securities regulators in British Columbia on time, we could be subject to such regulator issuing a cease trade order that would
affect the trading of our common shares in Canada, but not on the Nasdaq Capital Market.
Our securities are regulated in Canada by the
British Columbia Securities Commission. Under the securities laws of British Columbia, we are required to file with the BCSC quarterly
and annual financial statements and management’s discussion and analysis, and must also send this information to shareholders, on
request. Companies must also disclose material events or developments such as takeover bids and merger and acquisitions, which may affect
the value of the company’s shares. When a company fails to do so, a cease trade order banning trading in the securities of the company
or banning certain individuals and/or companies from trading in securities of the company may be issued by the BCSC. On April 6, 2023,
the British Columbia Securities Commission issued a cease trade order in Canada due to the late filing of the Company’s December
31, 2022 financial statements in Canada. The Company had also received a letter dated May 17, 2023 from the BCSC, noting Siyata’s
failure to file its interim financial statements and management’s discussion and analysis for the fiscal quarter ended March 31,
2023 and pay the required filing fee, and requesting Siyata to correct the deficiencies by filing the required materials. As of May 25,
2023, the Company had filed the outstanding continuous disclosure documents required under the securities legislation of British Columbia.
The April 2023 Order did not affect the trading of Siyata’s common shares or Prior Warrants on the Nasdaq Capital Market. That cease
trade order was revoked by the BCSC as of May 25, 2023 and, as a result of the revocation of the April 2023 Order, is legally authorized
to continue trading its shares in Canada.
U.S. holders of the Company’s shares
may suffer adverse tax consequences if we are characterized as a passive foreign investment company.
The rules governing “passive foreign investment
companies” (“PFICs”) can have adverse effects on U.S. Holders (as defined below in “Material U.S. Federal Income
Tax Considerations”) for U.S. federal income tax purposes. Generally, if, for any taxable year, at least 75% of our gross income
is passive income, or at least 50% of the value of our assets (generally, using a quarterly average) is attributable to assets that produce
passive income or are held for the production of passive income (including cash), we would be characterized as a PFIC for U.S. federal
income tax purposes. The determination of whether we are a PFIC, which must be made annually after the close of each taxable year, depends
on the particular facts and circumstances and may also be affected by the application of the PFIC rules, which are subject to differing
interpretations. Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (including
goodwill and other intangible assets), which will be affected by how, and how quickly, we spend any cash that is raised in this offering
or in any other subsequent financing transaction.
If we are a PFIC, a U.S. Holder would be subject
to adverse U.S. federal income tax consequences, such as ineligibility for certain preferred tax rates on capital gains or on actual or
deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income
tax laws and regulations. A U.S. Holder may in certain circumstances mitigate adverse tax consequences of the PFIC rules by filing an
election to treat the PFIC as a qualified electing fund, or QEF, or, if shares of the PFIC are “marketable stock,” which such
term includes the common shares, for purposes of the PFIC rules, by making a mark-to-market election with respect to the shares of the
PFIC. U.S. Holders should be aware that, for each tax year, if any, that we are a PFIC, we can provide no assurances that we will satisfy
the record keeping requirements of a PFIC, or that we will make available to U.S. Holders the information such U.S. Holders require to
make a QEF election with respect to us, and as a result, a QEF election may not be available to U.S. Holders. For more information, see
the discussion below under “Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company
Considerations.” You should consult your own tax advisors regarding the potential consequences to you if we were or were to become
a PFIC, including the availability, and advisability, of, and procedure for making, QEF elections and mark-to-market elections.
We incur significant increased costs as a result of operating
as a public company in the United States, and our management is required to devote substantial time to new compliance initiatives.
As a public company in the United States, we incur
significant legal, accounting and other expenses that we did not incur previously. We are subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended, which requires, among other things, that we file with the SEC annual, quarterly and current
reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted
by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including
requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant
corporate governance and executive-compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules
and regulations in these areas. Recent legislation permits emerging growth companies to implement many of these requirements over a longer
period and up to five years from the pricing of their initial public offering. We intend to take advantage of this new legislation but
cannot assure you that we will not be required to implement these requirements sooner than planned and thereby incur unexpected expenses.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may
lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in
which we operate our business in ways we cannot currently anticipate.
We expect the rules and regulations applicable
to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming
and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a
material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income
or increase our consolidated net loss and may require us to reduce costs in other areas of our business or increase the prices of our
products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain
director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We
cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these
requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our
board committees or as executive officers.
Although as a Foreign Private Issuer we
are exempt from certain corporate governance standards applicable to US issuers, if we cannot satisfy, or continue to satisfy, the initial
listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively
impact the price of our securities and your ability to sell them.
In order to maintain our listing on the Nasdaq
Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’
equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet
the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements
and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could
be subject to delisting. In that regard, on May 18, 2021, we received a notice from Nasdaq indicating that, as a result of not having
timely filed our Annual Report on Form 20-F for the fiscal year ended December 31, 2020, we were not in compliance with Nasdaq Listing
Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the Securities and Exchange Commission.
Nasdaq required that we submit a plan no later than July 16, 2021 to regain compliance and we have in fact regained compliance with Nasdaq’s
listing requirements since then.
USE OF PROCEEDS
We estimate that the
net proceeds from this offering will be approximately $2,005,827 after deducting the placement agent fees and estimated offering expenses
payable by us. We currently intend to use the net proceeds from this offering as working capital for general corporate purposes. We have
not determined the amount of net proceeds to be used specifically for any of such purposes.
Our expected use of net
proceeds from this offering and our existing cash and cash equivalents represents our intentions based upon our current plans and business
conditions, which could change in the future as our plans and business conditions evolve. As a result, we cannot predict with any certainty
our use of the net proceeds from this offering. Our management will retain broad discretion over the allocation of the net proceeds from
this offering. Accordingly, we will have discretion in the application of the net proceeds, and investors will be relying on our judgment
regarding the application of the proceeds of this offering.
Pending our use of the
net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term,
investment-grade, interest-bearing instruments and U.S. government securities.
CAPITALIZATION
The following table sets forth our capitalization
as of March 31, 2023:
|
● |
on a pro forma basis to reflect the issuance of 21,031,987 common shares pursuant to the cashless exercise of warrants; and the issuance of 50,000,000 common shares and the receipt of net proceeds, after deducting placement agency fees and other expenses related to the capital raise, of $1,797,959 in connection with the June Public Offering |
|
● |
on a pro-forma as adjusted basis to give further effect to the issuance and sale by us in this offering of 51,450,000 common shares, the maximum number of common shares offered by us in this prospectus at the public offering price of $0.0450 per common share, after deducting the Placement Agent fees and other estimated offering expenses payable by us of $308,322.65. |
The Pro-forma as adjusted information below is
illustrative only. You should read this table together with our financial statements and the related notes incorporated by reference into
this prospectus.
| |
Actual As of March 31, 2023 | | |
Pro Forma | | |
Pro-Forma as Adjusted | |
Cash and cash equivalents | |
$ | 1,179,694 | | |
$ | 2,977,653 | | |
$ | 4,983,481 | |
Warrant Liability | |
$ | 628,765 | | |
$ | 628,765 | | |
$ | 628,765 | |
Lease Obligations (short and long term) | |
$ | 838,303 | | |
$ | 838,303 | | |
$ | 838,303 | |
Total liabilities not included in capitalization | |
$ | 3,578,242 | | |
$ | 3,578,242 | | |
$ | 3,578,242 | |
Total Outstanding Long-Term Debt | |
$ | - | | |
$ | - | | |
$ | - | |
Stockholders’ Equity | |
| | | |
| | | |
| | |
Common shares, no par value: unlimited shares authorized; 62,911,417 shares actual; 133,943,404 shares pro forma; 185,393,404 pro-forma as adjusted | |
$ | 79,626,690 | | |
$ | 85,399,695 | | |
$ | 87,405,523 | |
Reserves | |
$ | 17,933,273 | | |
$ | 13,958,227 | | |
$ | 13,958,227 | |
Accumulated Other Comprehensive Income (loss) | |
$ | 98,870 | | |
$ | 98,870 | | |
$ | 98,870 | |
Shareholders’ Deficit | |
$ | (85,401,915 | ) | |
$ | (85,401,915 | ) | |
$ | (85,401,915 | ) |
Total Shareholders’ Equity | |
$ | 12,256,918 | | |
$ | 14,054,877 | | |
$ | 16,060,705 | |
Total Capitalization | |
$ | 12,256,918 | | |
$ | 14,054,877 | | |
$ | 16,060,705 | |
The number of common shares outstanding immediately
following this offering is based on 133,943,404 common shares outstanding as of July 11, 2023; assumes 51,450,000 common shares are sold
in this offering and excludes:
|
● |
1,506,138 common shares issuable upon the exercise of stock options outstanding under our 2016 Stock Option Plan, as amended, with a weighted-average exercise price of $3.53 per share; |
|
● |
3,165,000 common shares issuable upon the exercise of restricted share units outstanding under the 2016 Stock Option Plan, as amended; |
|
● |
25,943,282 common shares reserved for future issuance under our 2016 Stock Option Plan, as amended; |
|
● |
13,100,084 common shares issuable upon the exercise of outstanding warrants with a weighted average exercise price of $3.84 per share; and |
|
● |
931,507 common shares issuable upon the exercise of outstanding investment banker’s warrants with a weighted average exercise price of $4.87 per share; |
DESCRIPTION OF THE SECURITIES BEING OFFERED
Common Shares
A description of the common shares we are offering
pursuant to this prospectus supplement is set forth under the heading “Description of Share Capital,” starting on page 11
of the accompanying prospectus. As of July 11, 2023, we had 133,943,404 common shares outstanding.
This is an offering of our common shares. Our
common shares are listed on the Nasdaq Capital Market and currently trade under the symbol “SYTA.”
All of our issued and outstanding common shares
are fully paid and non-assessable. Our common shares are issued in registered form and are issued when registered in our register of shareholders.
Our shareholders may freely hold and vote their common shares.
We are authorized to issue an unlimited number of common shares with
no par value per share. Subject to the provisions of the Business Corporations Act and our articles regarding redemption and purchase
of the shares, the directors have general and unconditional authority to allot (with or without confirming rights of renunciation), grant
options over or otherwise deal with any unissued shares to such persons, at such times and on such terms and conditions as they may decide.
Such authority could be exercised by the directors to allot shares which carry rights and privileges that are preferential to the rights
attaching to common shares. No share may be issued at a discount except in accordance with the provisions of the Business Corporations
Act and applicable securities laws and Nasdaq requirements. The directors may refuse to accept any application for shares and may accept
any application in whole or in part, for any reason or for no reason.
On September 20, 2020, the Company consolidated
our issued and outstanding common shares on a 145-to-1 basis.
MATERIAL U.S. FEDERAL INCOME TAX
CONSIDERATIONS
Subject to the limitations and qualifications
stated herein, the following discussion is the opinion of Seward & Kissel LLP and sets forth the material U.S. federal income tax
considerations relating to the acquisition, ownership and disposition by U.S. Holders (as defined below) of common shares acquired pursuant
to this offering. The discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), its legislative
history, existing and proposed regulations thereunder, published rulings and court decisions, all as currently in effect and all subject
to change at any time, possibly with retroactive effect. This summary applies only to U.S. Holders and does not address tax consequences
to a non-U.S. Holder (as defined below) investing in common shares.
This discussion of a U.S. Holder’s tax consequences
addresses only those persons that hold common shares as capital assets and does not address the tax consequences to any special class
of holders, including without limitation, holders (directly, indirectly or constructively) of 10% or more of the Company’s equity
(based on value or voting power), dealers in securities or currencies, banks, tax-exempt organizations, insurance companies, financial
institutions, broker-dealers, regulated investment companies, real estate investment trusts, traders in securities that elect the mark-to-market
method of accounting for their securities holdings, persons that hold common shares that are a hedge or that are hedged against currency
or interest rate risks or that are part of a straddle, conversion or “integrated” transaction, persons required to accelerate
the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement, persons
subject to the “base erosion and anti-avoidance” tax, U.S. expatriates or former long-term residents of the United States,
partnerships or other pass-through entities for U.S. federal income tax purposes, U.S. Holders that acquire common shares in connection
with the exercise of employee stock options or otherwise as compensation for services and U.S. Holders whose functional currency for U.S.
federal income tax purposes is not the U.S. dollar. This discussion does not address the effect of alternative minimum taxes, U.S. federal
estate and gift tax, the 3.8% Medicare contribution tax on net investment income or any state, local or non-U.S. tax laws applicable to
a holder of common shares. This discussion does not take into account the individual facts and circumstances of any particular U.S. Holder
that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under
an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income
tax advice with respect to any particular U.S. Holder. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal,
U.S. state and local, U.S. federal estate and gift, alternative minimum, and non-U.S. tax consequences of the acquisition, ownership and
disposition of common shares.
This discussion also does not address the U.S.
federal income tax considerations applicable to U.S. Holders who are: (a) persons that have been, are, or will be a resident or deemed
to be a resident in Canada for purposes of the Income Tax Act (Canada); (b) persons that use or hold, will use or hold, or that are or
will be deemed to use or hold securities in connection with carrying on a business in Canada; (c) persons whose securities constitute
“taxable Canadian property” under the Income Tax Act (Canada); or (e) persons that have a permanent establishment in Canada
for the purposes of the Canada-U.S. Tax Convention.
For purposes of this discussion, a “U.S.
Holder” is a beneficial owner of common shares acquired pursuant to this offering that is for U.S. federal income tax purposes:
(a) an individual who is a citizen or resident of the United States; (b) a corporation (or other entity taxable as a corporation for U.S.
federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
(c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (d) a trust (i) if a court within
the United States can exercise primary supervision over its administration, and one or more U.S. persons have the authority to control
all of the substantial decisions of that trust, or (ii) that has a valid election in effect under applicable Treasury regulations to be
treated as a U.S. person. The term “non-U.S. Holder” means any beneficial owner of common shares acquired pursuant to this
offering that is not a U.S. Holder, a partnership (or an entity or arrangement that is treated as a partnership or other pass-through
entity for U.S. federal income tax purposes) or a person holding common shares through such an entity or arrangement.
If a partnership or an entity or arrangement that
is treated as a partnership for U.S. federal income tax purposes holds common shares, the tax treatment of a partner generally will depend
upon the status of the partner and the activities of the partnership. Partners in partnerships that hold common shares should consult
their own tax advisors. You are urged to consult your own independent tax advisor regarding the specific U.S. federal, state, local
and non-U.S. income and other tax considerations relating to the acquisition, ownership and disposition of common shares.
Cash Dividends and Other Distributions
Subject to the rules described below under the
heading “Passive Foreign Investment Company Considerations,” any distributions (including constructive distributions) made
with respect to a common share, a U.S. Holder generally will be required to include the amount of such distribution in gross income (including
the amount of Canadian taxes withheld, if any) as dividend income to the extent of the Company’s current and accumulated earnings
and profits (computed using U.S. federal income tax principles). A dividend generally will be taxed to a U.S. Holder at ordinary income
tax rates if the Company is a PFIC for the tax year of such distribution or the preceding tax year. To the extent that a distribution
exceeds the Company’s current and accumulated “earnings and profits,” such distribution will be treated first as a non-taxable
return of capital to the extent of the holder’s adjusted tax basis in such common shares and, thereafter, as gain from the sale
or exchange of such common shares (see “Sale or Disposition” below). There can be no assurance that the Company will maintain
calculations of the Company’s earnings and profits in accordance with U.S. federal income tax accounting principles. U.S. Holders
should therefore assume that any distribution with respect to the common shares will constitute ordinary dividend income. Dividends paid
on such common shares generally will not be eligible for the dividends received deduction generally allowed to U.S. corporations.
Dividends paid to a non-corporate U.S. Holder
by a “qualified foreign corporation” may be subject to reduced rates of taxation if certain holding period and other requirements
are met. A qualified foreign corporation generally includes a foreign corporation (other than a foreign corporation that is a PFIC in
the taxable year in which the dividend is paid or the preceding taxable year) if (i) its securities are readily tradable on an established
securities market in the United States or (ii) it is eligible for benefits under a comprehensive U.S. income tax treaty that includes
an exchange of information program and which the U.S. Treasury Department has determined is satisfactory for these purposes. The common
shares are readily tradable on an established securities market in the United States, the Nasdaq. However, the Company may also be eligible
for the benefits of the Canada-U.S. Tax Convention. Accordingly, subject to the PFIC rules discussed below, the Company expects that a
non-corporate U.S. Holder should qualify for the reduced rate on dividends so long as the applicable holding period requirements are met.
U.S. Holders should consult their own tax advisors regarding the availability of the reduced tax rate on dividends in light of their particular
circumstances.
Non-corporate U.S. Holders will not be eligible
for reduced rates of taxation on any dividends received from us if the Company is a PFIC in the taxable year in which such dividends are
paid or in the preceding taxable year.
A U.S. Holder who pays (whether directly or through
withholding) Canadian taxes with respect to dividends paid on the common shares (or with respect to any constructive dividend on the warrants)
may be entitled to receive, at the election of such U.S. Holder, either a deduction or a foreign tax credit for such Canadian taxes paid.
Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate
share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income
bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income
and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” In addition,
this limitation is calculated separately with respect to specific categories of income. Dividends paid by us generally will constitute
“foreign source” income and generally will be categorized as “passive category income.” However, if 50% or more
of the Company’s equity (based on voting power or value) is treated as held by U.S. persons, the Company will be treated as a “United
States-owned foreign corporation,” in which case dividends may be treated for foreign tax credit limitation purposes as “foreign
source” income to the extent attributable to the Company’s non-U.S. source earnings and profits and as “U.S. source”
income to the extent attributable to the Company’s U.S. source earnings and profits. Because the foreign tax credit rules are complex,
each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.
Sale or Disposition
Subject to the PFIC rules discussed below, a U.S.
Holder generally will recognize gain or loss on the taxable sale or exchange of its common shares in an amount equal to the difference
between the U.S. dollar amount realized on such sale or exchange and the U.S. Holder’s adjusted tax basis in the common shares sold
or otherwise disposed.
Assuming the Company is not a PFIC and has not
been treated as a PFIC during your holding period for common shares, such gain or loss will be capital gain or loss and will be long-term
gain or loss if the common shares have been held for more than one year. Under current law, long-term capital gains of non-corporate U.S.
Holders generally are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Capital gain
or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes.
Consequently, a U.S. Holder may not be able to use the foreign tax credit arising from any Canadian tax imposed on the disposition of
common shares unless such credit can be applied (subject to applicable limitations) against tax due on other income treated as derived
from foreign sources. U.S. Holders are encouraged to consult their own tax advisors regarding the availability of the U.S. foreign tax
credit in their particular circumstances.
Passive Foreign Investment Company Considerations
Status as a PFIC
The rules governing PFICs can have adverse tax
effects on U.S. Holders. The Company generally will be classified as a PFIC for U.S. federal income tax purposes if, for any taxable year,
either: (1) 75% or more of its gross income consists of certain types of passive income, or (2) the average value (determined on a quarterly
basis), of its assets that produce, or are held for the production of, passive income is 50% or more of the value of all of its assets.
For purposes of the PFIC provisions, “gross
income” generally means sales revenues less cost of goods sold, plus income from investments and from incidental or outside operations
or sources. Passive income generally includes dividends, interest, rents and royalties (other than certain rents and royalties derived
in the active conduct of a trade or business), annuities and gains from assets that produce passive income. If a non-U.S. corporation
owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as
owning its proportionate share of the assets of the other corporation and as directly receiving its proportionate share of the other corporation’s
income.
Additionally, if the Company is classified as
a PFIC in any taxable year with respect to which a U.S. Holder owns common shares, the Company generally will continue to be treated as
a PFIC with respect to such U.S. Holder in all succeeding taxable years, regardless of whether the Company continues to meet the tests
described above, unless the U.S. Holder makes the “deemed sale election” described below.
The Company does not believe that it is currently
a PFIC and does not anticipate becoming a PFIC in the foreseeable future. Notwithstanding the foregoing, the determination of whether
the Company is a PFIC is made annually and depends on the particular facts and circumstances (such as the valuation of its assets, including
goodwill and other intangible assets) and also may be affected by the application of the PFIC rules, which are subject to differing interpretations.
The Company’s status as PFIC depends upon the composition of its income and assets, which will be affected by how, and how quickly,
the Company spends any cash that is raised in any financing transaction, including this offering. In light of the foregoing, no assurance
can be provided that the Company is not currently a PFIC or that it will not become a PFIC in any future taxable year. Prospective investors
should consult their own tax advisors regarding the Company’s potential PFIC status.
U.S. Federal Income Tax Treatment of a Shareholder
of a PFIC
If the Company is classified as a PFIC for any
taxable year during which a U.S. Holder owns common shares, the U.S. Holder, absent certain elections (including the mark-to-market and
QEF elections described below), generally will be subject to adverse rules (regardless of whether the Company continues to be classified
as a PFIC) with respect to (i) any “excess distributions” (generally, any distributions received by the U.S. Holder on its
common shares in a taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder in the three
preceding taxable years or, if shorter, the U.S. Holder’s holding period for the common shares) and (ii) any gain realized on the
sale or other disposition, including a pledge, of common shares.
Under these adverse rules (a) the excess distribution
or gain will be allocated ratably over the U.S. Holder’s holding period, (b) the amount allocated to the current taxable year and
any taxable year prior to the first taxable year in which the Company is classified as a PFIC will be taxed as ordinary income, (c) the
amount allocated to each other taxable year during the U.S. Holder’s holding period in which the Company was classified as a PFIC
(i) will be subject to tax at the highest rate of tax in effect for the applicable category of taxpayer for that year and (ii) will be
subject to an interest charge at a statutory rate with respect to the resulting tax attributable to each such other taxable year, and
(d) loss recognized on the disposition of the common shares will not be deductible.
If the Company is classified as a PFIC, a U.S.
Holder generally will be treated as owning a proportionate amount (by value) of stock or shares owned by the Company in any direct or
indirect subsidiaries that are also PFICs and will be subject to similar adverse rules with respect to any distributions the Company receives
from, and dispositions the Company makes of, the stock or shares of such subsidiaries. You are urged to consult your tax advisors about
the application of the PFIC rules to any of the Company’s subsidiaries.
If the Company is classified as a PFIC and then
cease to be so classified, a U.S. Holder may make an election (a “deemed sale election”) to be treated for U.S. federal income
tax purposes as having sold such U.S. Holder’s common shares on the last day the Company’s taxable year during which the Company
was a PFIC. A U.S. Holder that makes a deemed sale election with respect to its common shares would then cease to be treated as owning
stock in a PFIC by reason of ownership of the common shares. However, gain recognized as a result of making the deemed sale election would
be subject to the adverse rules described above and loss would not be recognized.
PFIC “Mark-to-Market” Election
In certain circumstances, a U.S. Holder can avoid
certain of the adverse rules described above by making a mark-to-market election with respect to its common shares, provided that such
shares are “marketable.” The common shares generally will be marketable if they are “regularly traded” on certain
U.S. stock exchanges or on a foreign stock exchange that meets certain conditions. For these purposes, the common shares will be considered
regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during
each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. The common shares
are listed on the Nasdaq, which is a qualified exchange for these purposes. Consequently, if the common shares remain listed on the Nasdaq
and are regularly traded, and you are a holder of common shares, it is expected the mark-to-market election would be available to you
if the Company is a PFIC. There can be no assurance that the shares will be “regularly traded” in subsequent calendar quarters.
You should consult your own tax advisor as to the whether a mark-to-market election is available or advisable with respect to the common
shares.
A U.S. Holder that makes a mark-to-market election
must include in gross income, as ordinary income, for each taxable year that the Company is a PFIC an amount equal to the excess, if any,
of the fair market value of the U.S. Holder’s common shares at the close of the taxable year over the U.S. Holder’s adjusted
tax basis in such common shares. An electing U.S. Holder may also claim an ordinary loss deduction for the excess, if any, of the U.S.
Holder’s adjusted tax basis in its common shares over the fair market value of such common shares at the close of the taxable year,
but this deduction is allowable only to the extent of any net mark-to-market gains previously included in income. A U.S. Holder that makes
a mark-to-market election generally will adjust such U.S. Holder’s tax basis in its common shares to reflect the amount included
in gross income or allowed as a deduction because of such mark-to-market election. Gains from an actual sale or other disposition of common
shares in a year in which the Company is a PFIC will be treated as ordinary income, and any losses incurred on a sale or other disposition
of such common shares will be treated as ordinary losses to the extent of any net mark-to-market gains previously included in income.
If the Company is classified as a PFIC for any
taxable year in which a U.S. Holder owns common shares but before a mark-to-market election is made, the adverse PFIC rules described
above will apply to any mark-to-market gain recognized in the year the election is made. Otherwise, a mark-to-market election will be
effective for the taxable year for which the election is made and all subsequent taxable years. The election cannot be revoked without
the consent of the IRS, unless the common shares cease to be marketable, in which case the election is automatically terminated.
A U.S. Holder makes a mark-to-market election
by attaching a completed IRS Form 8621 to a timely filed U.S. federal income tax return. Each U.S. Holder should consult its own tax advisor
regarding the availability of, and procedure for making, a mark-to-market election.
A mark-to-market election is not permitted for
the shares of any of the Company’s subsidiaries that are also classified as PFICs. Prospective investors should consult their own
tax advisors regarding the availability of, and the procedure for making, a mark-to-market election.
PFIC “QEF” Election
In some cases, a shareholder of a PFIC can avoid
the interest charge and the other adverse PFIC consequences described above by obtaining certain information from such PFIC and by making
a QEF election to be taxed currently on its share of the PFIC’s undistributed income. The Company does not, however, expect to provide
the information regarding its income that would be necessary in order for a U.S. Holder to make a QEF election with respect to common
shares if the Company is classified as a PFIC.
PFIC Information Reporting Requirements
If the Company is a PFIC in any year, a U.S. Holder
will be required to file an annual information return on IRS Form 8621 regarding distributions received on its common shares and any gain
realized on disposition of such common shares. In addition, if the Company is a PFIC, a U.S. Holder generally will be required to file
an annual information return with the IRS (also on IRS Form 8621, which PFIC shareholders are required to file with their U.S. federal
income tax or information return) relating to their ownership of common shares. This new filing requirement is in addition to the pre-existing
reporting requirements described above that apply to a U.S. Holder’s interest in a PFIC (which this requirement does not affect).
NO ASSURANCE CAN BE GIVEN THAT THE COMPANY IS
NOT CURRENTLY A PFIC OR THAT IT WILL NOT BECOME A PFIC IN THE FUTURE. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE OPERATION OF THE PFIC RULES AND RELATED REPORTING REQUIREMENTS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE ADVISABILITY
OF MAKING ANY ELECTION THAT MAY BE AVAILABLE.
Reporting Requirements and Backup Withholding
Under U.S. federal income tax law and applicable
Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement
in, a non-U.S. corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on U.S. Holders that hold
certain specified foreign financial assets in excess of certain threshold amounts. The definition of specified foreign financial assets
includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial
institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer
or counterparty other than a U.S. person, and any interest in a non-U.S. entity. U.S. Holders may be subject to these reporting requirements
unless such U.S. Holder’s common shares are held in an account at certain financial institutions. Penalties for failure to file
certain of these information returns are substantial.
Payments made within the United States or by a
U.S. payor or U.S. middleman of (a) distributions on the common shares, and (b) proceeds arising from the sale or other taxable disposition
of common shares generally may be subject to information reporting and backup withholding, currently at the rate of 24%, if a U.S. Holder
(a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an
incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report
items subject to backup withholding, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct
U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding. However,
certain exempt persons generally are excluded from these information reporting and backup withholding rules. Any amounts withheld under
the U.S. backup withholding rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any,
or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup
withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments may be exempt from the dividend withholding tax rules
or otherwise eligible for a reduced withholding rate. Each U.S. Holder should consult its own tax advisor regarding the information reporting
and backup withholding rules.
THE ABOVE DISCUSSION DOES NOT COVER ALL TAX
MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. YOU ARE STRONGLY URGED TO CONSULT YOUR OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES
TO YOU OF AN INVESTMENT IN THE COMMON SHARES.
CERTAIN CANADIAN FEDERAL INCOME TAX IMPLICATIONS
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”)
and the regulations thereunder (the “Regulations”) generally applicable to an investor who acquires common shares pursuant
to this offering. This summary applies only to an investor who is a beneficial owner of common shares and who, for the purposes of the
Tax Act, and at all relevant times: (i) deals at arm’s length with the Company, (ii) is not affiliated with the Company; and (iii)
acquires and holds the common shares as capital property (a “Holder”).
common shares will generally be considered to
be capital property to a Holder unless they are held in the course of carrying on a business of trading or dealing in securities or were
acquired 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” for the purposes of the mark-to-market rules contained in the Tax Act, (ii) that is a “specified
financial institution” (as defined in the Tax Act); (iii) an interest in which is a “tax shelter investment” for purposes
of the Tax Act; (iv) that has made a functional currency reporting election under section 261 of the Tax Act to report its “Canadian
tax results” as defined in the Tax Act in a currency other than Canadian currency; (v) that has entered into, or will enter into,
a “derivative forward agreement” or “synthetic disposition arrangement” (each as defined in the Tax Act) with
respect to the common shares; or (vi) that receives dividends on common shares under or as part of a “dividend rental arrangement”
(as defined in the Tax Act). This summary does not address the deductibility of interest by a Holder who has borrowed money to acquire
the common shares. Such Holders should consult their own tax advisors.
Additional considerations, not discussed herein,
may apply to a Holder that is a corporation resident in Canada, and is or becomes (or does not deal at arm’s length for purposes
of the Tax Act with a corporation resident in Canada that is or becomes), as part of a transaction or event or series of transactions
or events that includes the acquisition of the common shares, controlled by a non-resident person or a group of non-resident persons that
do not deal with each other at arm’s length for purposes of the “foreign affiliate dumping” rules in section 212.3 of
the Tax Act. Such Holders should consult their own tax advisors.
This summary is based on the facts set out herein,
the provisions of the Tax Act and Regulations in force as of the date prior to the date hereof, counsel’s understanding of the current
administrative policies and assessing practices of the Canada Revenue Agency (“CRA”) published in writing by the CRA prior
to the date hereof. This summary takes into account all specific proposals to amend the Tax Act and the Regulations publicly announced
by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Proposed Amendments”) and assumes that
the Proposed Amendments will be enacted in the form proposed, although no assurance can be given that the Proposed Amendments will be
enacted in their current form or at all. This summary does not take into account or anticipate any changes in the law or in the administrative
practices or assessing policies of CRA, whether by legislative, governmental, administrative or judicial decision or action, nor does
it take into account or consider other federal or any provincial, territorial or foreign tax considerations, which may differ significantly
from the Canadian federal income tax considerations discussed in this summary.
This summary is not exhaustive of all possible
Canadian federal income tax considerations applicable to an investment in common shares. The following description of income tax matters
is of a general nature only and is not intended to be, nor should it be construed to be, legal or income tax advice to any particular
Holder. Holders are urged to consult their own tax advisors with respect to the tax consequences applicable to them based on their own
particular circumstances.
Taxation of Resident Holders
The following portion of this summary applies
to a Holder who, for the purposes of the Tax Act, is or is deemed to be resident in Canada at all relevant times (a “Resident Holder”).
A Resident Holder whose common shares might not otherwise qualify as capital property may be entitled to make an irrevocable election
permitted by subsection 39(4) of the Tax Act to deem the common shares, and every other “Canadian security” (as defined in
the Tax Act), held by such person, in the taxation year of the election and each subsequent taxation year to be capital property. Resident
Holders should consult their own tax advisors regarding this election.
Dividends
Dividends received or deemed to be received on
the common shares will be included in computing a Resident Holder’s income. In the case of an individual (other than certain trusts),
such dividends will be subject to the gross-up and dividend tax credit rules normally applicable in respect of “taxable dividends”
received from “taxable Canadian corporations” (as such terms are defined in the Tax Act). An enhanced gross-up and dividend
tax credit will be available to individuals in respect of “eligible dividends” designated by the Company to the Resident Holder
in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Company to designate dividends as eligible
dividends.
Dividends received or deemed to be received on
the common shares by a Resident Holder that is a corporation will be included in computing its income for the taxation year in which such
dividends are received, but such dividends will generally be deductible in computing the corporation’s taxable income. In certain
circumstances, subsection 55(2) of the Tax Act will treat a taxable dividend received or deemed to be received by a Resident Holder that
is a corporation as proceeds of disposition or a capital gain. Resident Holders that are corporations should consult their own tax advisors
having regard to their own circumstances.
A Resident Holder that is a “private corporation”
as defined in the Tax Act or a “subject corporation” as defined in subsection 186(3) of the Tax Act may be liable under Part
IV of the Tax Act to pay a refundable tax on dividends received or deemed to be received on the common shares to the extent that such
dividends are deductible in computing the Resident Holder’s taxable income for the taxation year. Such Resident Holders should consult
their own tax advisors in this regard.
Disposition of common shares
A Resident Holder who disposes, or is deemed to
dispose, of a common share (other than on a disposition to the Company that is not a sale in the open market in the manner in which shares
would normally be purchased by any member of the public in an open market) generally will realize a capital gain (or capital loss) in
the taxation year of the disposition equal to the amount, if any, by which the proceeds of disposition, net of any reasonable costs of
disposition, are greater (or are less) than the adjusted cost base to the Resident Holder of such common share immediately before the
disposition or deemed disposition. The taxation of capital gains and capital 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 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 common 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 common shares, directly or indirectly, through a partnership or trust. Resident Holders to whom these rules may be relevant
should consult their own tax advisors.
Additional Refundable Tax
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 any dividends or deemed dividends that are not deductible
in computing the Resident Holder’s taxable income and taxable capital gains. Proposed Amendments announced by the Minister of Finance
(Canada) on April 7, 2022 are intended to extend this additional tax and refund mechanism in respect of such investment income to “substantive
CCPCs” as defined in such Proposed Amendments and draft legislation implementing such Proposed Amendments that was released on August
9, 2022. Such Resident Holders should consult their own tax advisors.
Alternative Minimum Tax
Generally, a Resident Holder that is an individual
(other than certain trusts) that receives or is deemed to have received taxable dividends on the common shares or realizes a capital gain
on the disposition or deemed disposition of the common shares may be liable for alternative minimum tax under the Tax Act. Resident Holders
should consult their own tax advisors with respect to the application of alternative minimum tax.
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 not resident or deemed to be resident in
Canada, and (ii) do not use or hold common shares in the course of a business carried on or deemed to be carried on in Canada (“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 or that is an “authorized foreign bank” (as defined in the Tax Act). Such Non-Resident
Holders should consult their own tax advisors.
Dividends
Dividends paid or credited or deemed to be paid
or credited to a Non-Resident Holder on the common shares will generally be subject to Canadian withholding tax at the rate of 25% on
the gross amount of the dividend, unless such rate is reduced by the terms of an applicable income tax treaty or convention. 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, is the beneficial owner of the dividends, and is fully
entitled to benefits under the Treaty (a “Treaty Holder”) is generally reduced to 15% of the gross amount of the dividend.
The rate of withholding tax is further reduced to 5% if the beneficial owner of such dividend is a Treaty Holder that is a company that
owns, directly or indirectly, at least 10% of the voting stock of the Company. Non-Resident Holders should consult their own tax advisors
regarding the application of the Treaty or any other tax treaty.
Disposition of common shares
A Non-Resident Holder will not be subject to tax
under the Tax Act in respect of any capital gain realized on a disposition or deemed disposition of a common shares, nor will capital
losses arising therefrom be recognized under the Tax Act, unless the common shares constitute “taxable Canadian property”
(as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the Non-Resident Holder is not entitled to relief
under an applicable income tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident.
Provided that the common shares are listed on
a “designated stock exchange” for the purposes of the Tax Act (which currently includes the Nasdaq), at the time of disposition,
the common shares generally will 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, (i) 25% or more of the issued shares of any class or series of the capital
stock of the Company were owned by, or belonged to, any combination of (a) the Non-Resident Holder, (b) persons with whom the Non-Resident
Holder did not deal at arm’s length (for purposes of the Tax Act), and (c) partnerships in which the Non-Resident Holder or a person
described in (b) holds a membership interest directly or indirectly through one or more partnerships, and (ii) at such time, more than
50% of the fair market value of such shares was derived, directly or indirectly, from any combination of real or immovable property situated
in Canada, “Canadian resource property” (as defined in the Tax Act), “timber resource property” (as defined in
the Tax Act), or options in respect of, interests in, or for civil law rights in such properties, whether or not such property exists.
Notwithstanding the foregoing, the common shares may also be deemed to be taxable Canadian property to a Non-Resident Holder for purposes
of the Tax Act in certain other circumstances. Non-Resident Holders should consult their own tax advisors as to whether their common shares
constitute “taxable Canadian property” in their own particular circumstances.
In the event that a common share constitutes taxable
Canadian property of a Non-Resident Holder and any capital gain that would be realized on the disposition thereof is not exempt from tax
under the Tax Act pursuant to an applicable income tax treaty or convention, the income tax consequences discussed above for Resident
Holders under “Taxation of Resident Holders – Disposition of common shares” and “Capital Gains and Capital Losses”
will generally apply to the Non-Resident Holder. Non-Resident Holders whose common shares are taxable Canadian property should consult
their own tax advisors.
THE FOREGOING SUMMARY IS NOT INTENDED TO CONSTITUTE
A COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF COMMON SHARES AND IS NOT TAX OR LEGAL ADVICE.
HOLDERS OF COMMON SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF ACQUIRING, HOLDING AND
DISPOSING OF THE COMMON SHARES.
PLAN OF DISTRIBUTION
Pursuant to an Placement Agency Agreement, dated
July 11, 2023 (the “Placement Agency Agreement”), we have engaged Maxim Group LLC (the “Placement Agent”), to
act as our exclusive placement agent, on a reasonable best efforts basis, in connection with this offering pursuant to this prospectus
supplement and accompanying base prospectus. The terms of this offering are subject to market conditions and negotiations between us,
the Placement Agent, and prospective investors. The Placement Agency Agreement does not give rise to any commitment by the Placement Agent
to purchase any of the securities, and the Placement Agent will have no authority to bind us by virtue of the Placement Agency Agreement.
The Placement Agent is not purchasing the securities offered by us in this offering and is not required to assist us in selling any specific
number or dollar amount of common shares, but will assist us in this offering on a reasonable best efforts basis.
On July 11, 2023, we entered into a Securities
Purchase Agreement directly with certain institutional investors who have agreed to purchase the common shares in this offering.
We expect to deliver the common shares being offered
pursuant to this prospectus supplement and accompanying base prospectus on or about July 13, 2023, subject to satisfaction of customary
closing conditions.
Fees and Expenses
We have agreed to pay to the Placement Agent:
(i) a cash fee equal to 7.0% of the aggregate gross proceeds raised in this offering and (ii) to reimburse the Placement Agent
up to $40,000 for reasonable and documented fees and expenses of legal counsel and other actual out-of-pocket expenses.
| |
Per common share | | |
Total | |
Public offering price per common share | |
$ | 0.0450 | | |
| 2,315,250.00 | |
Placement Agent fee per common share(1) | |
$ | 0.00315 | | |
| 162,067.50 | |
Proceeds, before expenses, to us, common shares | |
$ | 0.04185 | | |
$ | 2,153,182.50 | |
We estimate the total expenses
payable by us for this offering to be approximately $308,322.65, which amount includes (i) a Placement Agent’s fee of $162,067.50,
assuming the purchase of all of the common shares we are offering; (ii) up to $40,000 for the Placement Agent’s accountable expenses;
and (iii) other estimated expenses of approximately $107,355.50 which include legal, accounting, printing costs and various fees associated
with the registration and listing of our shares.
Tail Fee
We have also agreed to pay the Placement Agent, subject to certain
exceptions, a tail fee if within twelve (12) months following the closing of this offering or any such termination (the “Tail Period”),
we complete any financing of equity, equity-linked, convertible or debt or other capital raising activity of the Company or receive any
proceeds from, any and all of the investors contacted or introduced to us by the Placement Agent during the Tail Period. We will then
pay the Placement Agent upon the closing of such financing or receipt of such proceeds compensation equal to the compensation in this
offering.
Indemnification
We have agreed to indemnify the Placement Agent
and specified other persons against certain liabilities, including liabilities under the Securities Act, and the Exchange Act, and to
contribute to payments that the Placement Agent may be required to make in respect of such liabilities.
Regulation M
The Placement Agent may be deemed to be an underwriter
within the meaning of Section 2(a)(11) of the Securities Act and any fees received by it and any profit realized on the sale of the securities
by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. The Placement Agent
will be required to comply with the requirements of the Securities Act and the Exchange Act including, without limitation, Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by
the Placement Agent. Under these rules and regulations, the Placement Agent may not (i) engage in any stabilization activity in connection
with our securities; and (ii) bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities,
other than as permitted under the Exchange Act, until they have completed their participation in the distribution.
Lock-up Restrictions
In the Securities Purchase Agreement, we have
agreed, subject to certain exceptions, not to issue or enter into any agreement to issue or announce the issuance or proposed issuance
of any common shares or any securities convertible into or exchangeable for common shares or file any registration statement or amendment
or supplement thereto common shares or any securities convertible into or exchangeable for common shares for 30 days following the closing
date of this offering. In addition, we have agreed to not issue any securities that are subject to a price reset based on the trading
prices of our common stock or upon a specified or contingent event in the future or enter into any agreement to issue securities at a
future determined price for a period of 30 days following the closing date of this offering.
Each of our executive officers, directors have
entered into lock-up agreements pursuant to our previous offering, under which these parties have agreed not to sell or otherwise transfer
their shares for a period of 90 days after the closing date which is first stated above in this prospectus supplement. These lock-up restrictions
are subject to certain exceptions and may be waived by the Placement Agent at any time. As a result of these contractual restrictions,
our common shares subject to lock-up agreements will not be eligible for sale, including pursuant to Rules 144 or 701 under the Securities
Act, until these agreements expire or the restrictions are waived by the Placement Agent.
Other Relationships
From time to time, the Placement Agent may provide
in the future, various advisory, investment and commercial banking and other services to us in the ordinary course of business, for which
it may receive customary fees and commissions. Except as disclosed in this prospectus supplement, we have no present arrangements with
the Placement Agent for any services.
Nasdaq Capital Market Listing
Our common shares are currently traded on The
Nasdaq Capital Market under the symbol “SYTA.” On July 10, 2023, the last reported sale price of our common share was $0.072
per share.
EXPENSES
The following are the estimated expenses of the
issuance and distribution of the securities being registered under the registration statement of which this prospectus supplement forms
a part, all of which will be paid by us.
SEC registration fee | |
$ | 255.15 | (1) |
Placement Agent’s fees | |
$ | 162,067.50 | |
Placement Agent’s expenses | |
$ | 40,000 | |
Legal fees and expenses | |
$ | 80,000 | |
Accounting fees and expenses | |
$ | 10,000 | |
Transfer agent, printing and miscellaneous fees and expenses | |
$ | 16,000 | |
Total | |
$ | 308,322.65 | |
1 | Represents
the portion of the previously paid filing fee for this offering on the Form F-3. |
ENFORCEABILITY OF CIVIL LIABILITY
We are incorporated under the laws of British
Columbia, Canada. Service of process upon us and upon certain of our directors and officers and the experts named in this prospectus,
who reside outside the U.S., may be difficult to obtain within the U.S. Furthermore, because a substantial amount of our assets and certain
of our directors and officers are located outside the U.S., any judgment obtained in the U.S. against us or any of our directors and officers
may not be collectible within the U.S.
We have also been advised by CC Corporate Counsel
Professional Corporation, our Canadian legal advisor, that there is doubt as to the enforceability, in original actions in Canadian courts,
of liabilities based on the U.S. federal securities laws or “blue sky” laws of any state within the United States and as to
the enforceability in Canadian courts of judgments of U.S. courts obtained in actions based on the civil liability provisions of the U.S.
federal securities laws or any such state securities or blue sky laws. Therefore, it may not be possible to enforce those judgments against
us, certain of our directors and officers, the experts named in this prospectus.
LEGAL MATTERS
Certain legal matters with respect to Canadian
law and with respect to the validity of the offered securities under the law of British Columbia, Canada, will be passed upon for us by
CC Corporate Counsel Professional Corporation. Certain legal matters with respect to New York law and U.S. federal securities law will
be passed upon for us by Carmel, Milazzo & Feil LLP, New York, New York. Loeb & Loeb LLP, New York, New York is acting as counsel
for the Placement Agent in connection with this offering.
EXPERTS
The consolidated financial statements of the Company
incorporated in this prospectus supplement by reference to our Annual Report on Form 20-F for the year ended December 31, 2022 have been
audited by Barzily and Co., CPA’s, an independent registered public accounting firm, as set forth in their reports, which are incorporated
herein by reference. Such consolidated financial statements have been so incorporated by reference in reliance upon such reports given
on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements
and other information regarding issuers, including us, that file electronically with the SEC. As a foreign private issuer, we are exempt
under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers,
directors and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained
in Section 16 of the Exchange Act and related Exchange Act rules. In addition, we are not required under the Exchange Act to file
periodic reports and financial statements with the Commission as frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act.
You may access the documents that we file with
the SEC at the SEC’s website at www.sec.gov. Copies of certain information filed by us with the SEC are also available
on our website at www.siyatamobile.com. Information contained in or accessible through our website does not constitute a part
of this prospectus supplement or the accompanying prospectus and is not incorporated by reference in this prospectus supplement or the
accompanying prospectus.
This prospectus supplement and the accompanying
prospectus are part of a registration statement on Form F-3 we filed with the SEC. This prospectus supplement and the accompanying prospectus
do not contain all of the information set forth in the registration statement and the exhibits to the registration statement. For further
information with respect to us and the securities we are offering under this prospectus supplement and the accompanying prospectus, we
refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. You should rely
only on the information contained in this prospectus supplement and the accompanying prospectus or incorporated by reference in prospectus
supplement and the accompanying prospectus. We have not authorized anyone else to provide you with different information.
INCORPORATION OF DOCUMENTS BY REFERENCE
We file annual and special reports and other information
with the Commission (File Number 001-39557). These filings contain important information which does not appear in this prospectus. The
Commission allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important
information to you by referring you to other documents which we have filed or will file with the Commission. The information incorporated
by reference is considered to be part of this prospectus, and information in documents that we file later with the Commission will automatically
update and supersede information in this prospectus. We incorporate by reference into this prospectus the documents listed below and any
future filings made by us with the Commission under Section 13(a), 13(c) 15(d) of the Exchange Act, except for information “furnished”
to the Commission that is not deemed filed and not incorporated by reference into this prospectus (unless otherwise indicated below),
until the termination of the offering of securities described in the applicable prospectus supplement:
| ● | our
Annual Report on Form 20-F
for the fiscal year ended on December 31, 2022, initially filed with the SEC on May 15,
2023, and as amended by Amendment No. 1 to our Annual Report on Form 20-F/A for the fiscal year ended on December 31, 2022, filed with the SEC on May
18, 2023 (together hereinafter referred to as the “Form 20-F”); |
|
● |
our
Report of Foreign Private Issuer on Form 6-K furnished to the SEC on January
9, 2023, January
18, 2023, January
19, 2023, January
23, 2023; February
21, 2023; February
23, 2023; February
27, 2023; March
06, 2023; March
13, 2023; March
20, 2023; March
22, 2023; March
27, 2023; March
27, 2023; April
03, 2023; April
06, 2023; April
07, 2023; April
17, 2023; April
24, 2023; April
25, 2023; April
26, 2023; May
03, 2023; May
11, 2023; May
16, 2023; May
17, 2023; May
19, 2023; May
22, 2023; May
24, 2023; June
1, 2023; June 5, 2023; June
12, 2023; June 14,
2023; June 15,
2023; June 20,
2023; June 21,
2023; June 22,
2023; June 28,
2023; July 3,
2023; and July 6,
2023 and |
| ● | the
description of our securities registered under Section 12 of the Exchange Act contained in the Form
8-A12B, as filed with the Commission on September 24, 2020, including any amendment or report filed for the purpose of updating
such description; and |
| ● | any
future filings made with the Commission under Section 13(a), 13(c) or 15(d) of the Exchange Act. |
In addition, any reports on Form 6-K submitted
to the Commission by the registrant pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness
of the registration statement that we specifically identify in such forms as being incorporated by reference into the registration statement
of which this prospectus forms a part and all subsequent Annual Reports on Form 20-F filed after the effective date of this registration
statement and prior to the termination of this offering and any reports on Form 6-K subsequently submitted to the Commission or portions
thereof that we specifically identify in such forms as being incorporated by reference into the registration statement of which this prospectus
forms a part, shall be considered to be incorporated into this prospectus by reference and shall be considered a part of this prospectus
from the date of filing or submission of such documents.
You should rely only on the information contained
or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not authorized any other person to
provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
We are not making 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 any accompanying prospectus supplement as well as the information we previously filed
with the Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business,
financial condition and results of operations and prospects may have changed since those dates. Certain statements in and portions of
this prospectus update and replace information in the above listed documents incorporated by reference. Likewise, statements in or portions
of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus
or the above listed documents.
We will provide you without charge, upon your
written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents
which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to Siyata Mobile
Inc., Attn: Chief Financial Officer, 1751 Richardson Street, Suite #2207, Montreal, Quebec Canada H3K-1G6; telephone: 514-500-1181. You
may also obtain information about us by visiting our website at https://www.siyatamobile.com. The information contained on
or accessible through our website is not incorporated by reference and is not part of this prospectus.
PROSPECTUS
SIYATA MOBILE INC.
$100,000,000
Common Shares
Warrants
Rights
Purchase Contracts
Debt Securities
Units
This prospectus relates to the sale by Siyata
Mobile Inc. (the “Company”) from time to time in one or more offerings of up to $100,000,000 aggregate amount of common shares
in the capital of the Company (“common shares”), warrants to purchase common shares or Debt Securities (as defined below),
or any combination thereof (“Warrants”), subscription rights evidencing the right to purchase common shares or Debt Securities,
or any combination thereof (“Rights”), purchase contracts to purchase common shares, Warrants, Rights, Debt Securities, or
any combination thereof (“Purchase Contracts”), debt securities of the Company (“Debt Securities”), as well as
units that include any of these securities (“Units”) and, collectively with the common shares, Warrants, Rights, Purchase
Contracts and Debt Securities, the “securities”).
We will provide the specific terms of the securities
to be offered in one or more supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement
carefully before you invest in our securities. This prospectus may not be used to offer and sell our securities unless accompanied by
a prospectus supplement describing the method and terms of the offering of those offered securities.
We may sell the securities directly or to or
through underwriters or dealers, and also to other purchasers or through agents. The names of any underwriters or agents that are included
in a sale of securities to you, and any applicable commissions or discounts, will be stated in an accompanying prospectus supplement.
For additional information on the methods of sale, you should refer to the section entitled “Plan of Distribution” in this
prospectus.
The common shares are traded on the Nasdaq Capital
Market under the symbol “SYTA” and the Prior Warrants (as defined herein) are traded on the Nasdaq Capital Market under the
symbol “SYTAW.” The closing price of the common shares on the Nasdaq Capital Market on June 30, 2022 was $1.08 per share.
An investment in these securities involves
risks. See the section entitled “Risk Factors” on page 11 of this prospectus, and other risk factors contained in any applicable
prospectus supplement and in the documents incorporated by reference herein and therein.
Neither the U.S. Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus
is July 1, 2022.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
In this prospectus, except as otherwise indicated
or as the context otherwise requires, “Siyata”, “Siyata Mobile”, “we”, “our”, “us”
and the “Company” refer to Siyata Mobile Inc., a company organized under the laws of British Columbia, Canada.
This prospectus is part of a registration statement
on Form F-3 that the Company filed with the Securities and Exchange Commission (the “Commission”) using a “shelf”
registration process. Under this shelf registration process, the Company may, from time to time sell the securities described in this
prospectus in one or more offerings pursuant to this registration statement, or any combination of the securities described in this prospectus.
The Company may use the shelf registration statement to sell up to an aggregate of $100,000,000 of securities.
The Company will pay the expenses, other than
underwriting discounts and commissions, if any, associated with the sale of the securities pursuant to this prospectus. We will provide
the specific terms of the securities to be offered in one or more supplements to this prospectus. The prospectus supplement 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, you should rely on the prospectus supplement. You should read
both this prospectus and any applicable prospectus supplement, together with additional information described below under the captions
“Where You Can Find Additional Information.”
You should rely only on the information contained
or incorporated by reference in this prospectus and in any prospectus supplement. The Company has not authorized any other person to
provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
The Company will not make any 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, if applicable, the supplement to this prospectus is accurate as of the
date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated
by reference, unless indicated otherwise. The Company’s business, financial condition, results of operations and prospects may
have changed since those dates. This prospectus may not be used to consummate sales of our securities, unless it is accompanied by a
prospectus supplement. To the extent there are inconsistencies between any prospectus supplement, this prospectus and any documents incorporated
by reference, the document with the most recent date will control.
MARKET INFORMATION
This prospectus and the documents incorporated
by reference contain certain industry and market data that were obtained from third-party sources, such as industry surveys and industry
publications. This prospectus and the documents incorporated by reference also contain other industry and market data, including market
sizing estimates, growth and other projections and information regarding our competitive position, prepared by our management on the
basis of such industry sources and our management’s knowledge of and experience in the industry and markets in which we operate
(including management’s estimates and assumptions relating to such industry and markets based on that knowledge). Our management
has developed its knowledge of such industry and markets through its experience and participation in these markets.
In addition, industry surveys and industry publications
generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness
of such information is not guaranteed and that any projections they contain are based on a number of significant assumptions. Forecasts,
projections and other forward-looking information obtained from these sources involve risks and uncertainties and are subject to change
based on various factors, including those discussed in the section “Special Note About Forward-Looking Statements” below.
You should not place undue reliance on these statements.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus contains
“forward-looking statements”, which includes information relating to future events, future financial performance, financial
projections, strategies, expectations, competitive environment and regulation. Words such as “may”, “should”,
“could”, “would”, “predicts”, “potential”, “continue”, “expects”,
“anticipates”, “future”, “intends”, “plans”, “believes”, “estimates”,
and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should
not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will
be achieved. Forward-looking statements are based on information we have when those statements are made or management’s good faith
belief as of that time with respect to future events, and are subject to significant risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors
that could cause such differences include, but are not limited to:
|
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the size and growth potential of the markets for our products, and our ability to serve those markets; |
|
● |
the rate and degree of market acceptance of our products; |
|
● |
our ability to expand our sales organization to address effectively existing and new markets that
we intend to target; |
|
● |
impact from future regulatory, judicial, and legislative changes or developments in the U.S. and
foreign countries; |
|
● |
our ability to compete effectively in a competitive industry; |
|
● |
our ability to obtain funding for our operations and effectively utilize the capital raised therefrom; |
|
● |
our ability to attract collaborators and strategic partnerships; |
|
● |
our ability to meet the continued listing requirements and standards of the Nasdaq Capital Market,
or Nasdaq; |
|
● |
our ability to meet our financial operating objectives; |
|
● |
the availability of, and our ability to attract, qualified employees for our business operations; |
|
● |
general business and economic conditions; |
|
● |
our ability to meet our financial obligations as they become due; |
|
● |
positive cash flows and financial viability of our operations and any new business opportunities; |
|
● |
our ability to secure intellectual property rights over our proprietary products or enter into license
agreements to secure the legal use of certain patents and intellectual property; |
|
● |
our ability to be successful in new markets; |
|
● |
our ability to avoid infringement of intellectual property rights; and |
|
● |
the effects of the global COVID-19 pandemic. |
The foregoing does not
represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we
are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see “Risk
Factors”, and “Business”, and “Incorporation of Certain Documents by Reference”, as well as in our Annual
Report on Form 20-F under Item 3. Key Information – D. Risk Factors”, “Item 4. Information on the Company”, and
“Item 5. Operating and Financial Review and Prospects” for additional factors that could adversely impact our business and
financial performance.
Moreover, new risks
regularly emerge and it is not possible for our management to predict or articulate all the risks we face, nor can we assess the impact
of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those
contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available
to us on the date of this prospectus and as of the dates of the documents incorporated herein by reference. Except to the extent required
by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus
and the documents incorporated by reference herein. Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those described in this prospectus as anticipated, believed, estimated
or expected.
Readers are urged to
carefully review and consider the various disclosures made throughout this prospectus which are designed to advise interested parties
of the risks and factors that may affect our business, financial condition, results of operations and prospects.
You should not put undue
reliance on any forward-looking statements. Any forward-looking statements in this prospectus are made as of the date hereof, and we
undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events
or otherwise, except as required by law.
BUSINESS
The Problem
Businesses and organizations
that rely on commercial vehicle fleets to carry out critical business functions and operations have historically used two-way radios
(“Land Mobile Radios” or “LMR”) to communicate between drivers and headquarters. LMR communication devices have
historically encountered several challenges. These devices are typically expensive, generally consisting of older and outdated technology.
LMR devices are also limited in their range of communication, as local radio bandwidth is limited. Most devices are restricted to communications
in one metro areas with limited connectivity with neighboring areas, agencies or companies, hindering headquarters’ ability to
communicate with their vehicles. Occasionally, vehicles communicating through LMR will often encounter a communication “dead zone”,
thus hindering these vehicles’ abilities to communicate during times of emergencies. They are single-purpose devices, allowing
for communications through “push-to-talk” (“PTT”) broadcasting with limited additional features.
UV350 In-Vehicle Solution
The Uniden® UV350 (the “UV350”)
is the world’s first and only smartphone with 4G/LTE capabilities specifically designed for in- vehicle usage, optimizing mobile
communications for on the road commercial fleet vehicles. Unlike existing Land Mobile Radio (LMR) technology, that operates over radio
signals, the UV350 operates over standard 4G cellular networks. The UV350 received United States Federal Communications Commission’s
approval as a cellular device, Industry Canada’s approval, certification of PCS Type Certification Review Board (“PTCRB”),
Google GMS certification, and Conformité Européenne (“CE”) and Emark certification. The UV350 and has been
certified or approved for manufacturing or sale by several North American wireless carriers, or our “channel partners”, including
AT&T, Bell Mobility, Rogers, Verizon and by several international wireless carriers. The UV350’s reputation and approvals from
industry leaders represent a barrier to entry for potential direct competitive devices, with North American carrier for in-vehicle devices
for fleet communication.
AT&T, our largest channel partner, represented
14% of our revenues in 2020. AT&T did not enter into a master services agreement with the Company, but rather, enters into standard
purchase order forms on a per order basis. We do does not obligate AT&T to fulfill any required minimum purchase orders. Our typical
purchase order contracts with AT&T involve standard warranties and indemnification, insurance requirement and delivery terms. Each
separate purchase order agreement can be terminated by AT&T within 10 days’ notice upon notice of and failure to cure any breach
by the Company of such agreement.
The UV350 contains several unique features, including:
|
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Android Operating System Compatibility. Android compatibility allows customers to download
apps such as a PTT app and have it configured by the wireless carrier to ensure your workers can communicate one-to-one, or in a
full group call. Because virtually any Android fleet application can be downloaded, this enables customers to eliminate redundant
single-purpose hardware in their fleet vehicles. |
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Noise Cancelation. Best-in-class loud and clear audio in noisy commercial vehicles. Our bundled
kit includes a dedicated loud speaker and microphone for both phone calls and Push To Talk (PTT) calls. |
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Economic. Far lower price to customers compared to using multiple single purpose devices which
can cost thousands of dollars to purchase, and lots of time to install and maintain. With our UV350, the truck only needs one sim
card with a voice and data plan as opposed to using multiple devices with multiple sims and plans. This allows lower monthly fees
per vehicle. |
|
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Safety. With its large display a dedicated palm mic and one-touch buttons for key driver tasks,
the UV350 is safe for drivers, allowing them to keep their eyes on the road and hands on the wheel. |
|
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Wi-Fi Hotspot. Customers can connect up to five devices to the UV350 via Wi-Fi, giving the
customers added connectivity options. |
|
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Always Powered. The UV350 is powered by the vehicle’s battery so it automatically powers
on when the vehicle is started up, and it defaults to turn off automatically when the vehicle is turned off. This default setting
can be changed for customers who need the device to stay on after the vehicle is shut off. The device is designed to operate properly
in any extreme temperature situation. |
|
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4G/LTE. The UV350 works on the multiple wireless carrier networks which provide the best nation-wide
coverage options for customers and is compatible with high speed 4G data networks. |
|
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Accessories. In addition to the UV350 standard bundle kit which includes everything that customers
need to get started, Siyata also offers optional PTT accessories such as a Wired Palm Mic which most PTT customers prefer. For customers
whose fleet vehicles travel into areas with limited cellular reception, Siyata offers an outdoor, roof mounted antenna as well as
an optional in-line cellular booster to amplify the cellular signal so that fleet vehicles can maintain connection when they are
further away from cellular tower sites. |
Our Rugged Handheld Solution
Siyata has entered into supply agreements with
several North American wireless carriers. The Company believes that additional complementary PTT devices can be offered by Siyata to
these wireless carriers. The rugged handheld market, smartphones designed specifically to withstand hardship and exposure, have relatively
few competitors, and wireless carriers appear poised to expand their offerings in this category.
Siyata currently offers a rugged handheld clamshell
device (UR7) outside of North America for customers who demand a cost-effective high performing PTT device. Another rugged handheld device
(UR5) is intended to complement our commercial vehicle devices for international markets and will support popular Push-to-Talk apps.
Key vertical markets for rugged handheld devices are construction job sites, warehouses, factories, hotels, retail stores, schools, landscaping
crews, special events. Customers who would consider our rugged handheld devices are looking to increase the worker’s productivity,
and to reduce their total cost of ownership compared to other devices.
In Q3 2021, Siyata unveiled its next generation
rugged device, the SD7. The SD7 is Siyata’s first mission critical push-to-talk device (MCPTT) and is also the first rugged handset
that Siyata will offer in North America, expected in the second half of 2021, then in Europe in 2022. With this device, Siyata expects
to increase its MCPTT market share not only in the first responder market, but also in the utilities, transportation and waste management
markets.
|
● |
Tough & Rugged. Our rugged devices meet the industry standards for ruggedness and water
resistance. |
|
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Large PTT Button. With a large dedicated PTT Button, this makes it easy for customers
to use for PTT, as opposed to having to hold down a virtual button on the screen. |
|
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Loud and Clear. Its powerful speakers ensure loud, clear audio sound quality. |
|
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Large optional extended. Long lasting battery to keep working for several days, in most customer
use cases. The battery can be easily and quickly replaced on short notice. |
|
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SOS Button. Workers can alert supervisors of emergency situations that occur on the job. |
Our Cellular Booster Solution
We offer a full line of cellular boosters, a
device intended to form a wireless system to boost cellular reception, under the brand name Uniden®®. We have entered into a
partnership whereby Uniden® America Corporation has granted the exclusive license to Siyata Mobile to market cellular signal boosters
under the Uniden®® brand name within the U.S. and Canada. As a world-wide leader in wireless communications, Uniden® America
Corporation, the North American subsidiary of Japan-based Uniden® Corporation, manufactures and markets wireless consumer electronic
products. Based in Fort Worth, Texas, Uniden®®Uniden® sells
its products through dealers and distributors throughout North, Central and South America. Uniden®®Uniden®
Cellular booster kits solve issues of poor reception, dropped calls, lost data and transmission quality issues that users routinely experience
on every cellular network. These easy-to-install cellular booster kits are designed for homes, cabins, offices, and buildings to improve
the cellular signal reception indoors, allowing people to use their cellular phones indoors where they previously could not do so. We
also offer models designed for vehicles, both wired and wireless boosters, to improve the cellular reception inside a vehicle that is
driving in a weak cellular signal area. Uniden® cellular signal boosters offer kits designed to offer cellphone coverage for difference
distances, including kits for a small area of 1 or 2 rooms, and more expansive solutions that will cover over 100,000 sq. ft. Our cellular
signal boosters are carrier agnostic to ensure the best signal integrity, supporting 2G, 3G, 4G and soon 5G (in development) technologies
on all carriers operating in North America.
The Uniden®® U60C 4G Cellular Booster
and Uniden®® U65C 4G Cellular Booster are user friendly devices that simply require plugging it into a power source and turning
it on. The device will automatically adjust to provide the user with a boosted cellular signal in their trouble zone. These devices range
in price starting from a retail price of $347 USD and up. The Uniden®® U60P Cellular Booster, Uniden®® U65P Cellular
Booster, and Uniden®® U70P Cellular Booster and available in 3G and 4G versions. These devices are just as easy to install as
the consumer boosters but include additional features, such as manual gain control override, LCD status display and input signal display.
The Uniden®® Link 4G Cradle Style Cellular
Booster is used for single use case, Uniden®® UM50 4G Cellular Booster works great in cars, vans, first responders, and any situation
on the go where you need to expand your coverage zone. The Uniden®® UM2M 4G Cellular Booster is our direct connect unit that
works in vehicles connected to your in-vehicle phone or your cellular modem. These devices range in price starting from a retail price
of $197 USD and up.
The Uniden®® UM2M 4G Cellular Booster
is our newest product in our line up and one of the most promising. We are very excited to launch this item as it is not only great for
machine-to-machine application such as in vending and ATM machines, but this booster perfectly complements the company’s Uniden®®
UV350 In Vehicle Smartphone. This booster connects directly to the Uniden®® UV350 In Vehicle Smartphone giving the device a much-expanded
coverage zone. This is a complete solution that many customers need. The combination of Uniden®® UV350 and Uniden®® M2M
4G Cellular Booster gives our customer the ultimate enterprise class solution to enjoy crystal clear phone calls and lightning fast data
speeds.
Industry
Communication, productivity and safety among
task workers are the central requirements in business-critical and mission-critical environments. Organizations with remote and disparate
workers—from police and firefighters to construction, oil rigs and manufacturing workers—require extremely durable communication
solutions that provide reliable and secure voice, data and workflow applications.
The types of vehicles that we provide communication
solutions to include school buses, utilities, oil and gas, waste management, snow plows, transportation, construction vehicles, and first
responder vehicles. In North America there are, according to the United States Department of Transportation, over 20 million of such
vehicles, representing a significant potential customer base for Siyata. Each of these types of vehicles demands superior in-vehicle
communications solutions.
A cost-effective solution is essential for both
government fleets, such as first responder police vehicles, and commercial enterprises, including construction companies. These industries
are concerned with managing and controlling their capital expenditures and operating expenses and they adopt such mindset with their
selection of communication devices for their staff and fleets.
These industries are also required to adhere
to the current safety and operational requirements, while maintaining the flexibility to adjust to meet future relevant requirements.
For example, currently, the fleet managers may only require PTT communications with the drivers, and the ability to track the location
of their vehicles. However, latest industry trends require that drivers possess a driver emergency safety app or a workforce automation
solution. A communications solution based on the UV350 contains built-in flexibility to adapt with customer demand. The UV350 is a highly
connected Internet of Things (IoT) platform which supports downloadable Android apps for future functionality.
There is a demand within our targeted vertical
markets to be connected with the First Responder Network Authority (“FirstNet Authority” or “FirstNet”). FirstNet
is a nationwide high-speed broadband wireless network providing a single interoperable platform for law enforcement, firefighters, paramedics
and other public safety officials in every state, county, locality and tribal area. AT&T has developed a 4G network for organizations
or agencies in times of emergencies to communicate and coordinate response efforts. AT&T’s FirstNet network is reserved for
“primary” first responder users such as police, fire, and ambulance, and it includes “extended primary” users
such as utilities, snow plows, and yellow school buses, who are occasionally summoned for emergencies. The United States Government is
increasingly encouraging first-responder organizations and agencies to transition to a FirstNet-based communications network to facilitate
communications and coordination during emergencies.
According to the Smithsonian Institute, there
approximately 500,000 yellow school buses in the United States. School buses primarily communicate through the existing legacy technology
of two-way radios (LMR). Many county school districts own both their own fleet of buses and their own radio towers with two-way radio
service coverage that is restricted to within in their county. However, occasionally, when school buses transport students outside their
county for field trips and sports events, the drivers are unable to communicate with their dispatchers. The UV350 device addresses this
problem since it uses the nationwide cellular networks. Moving from a solely PTT to a cellular-based system also precludes the necessity
for counties and school districts to maintain older radio towers.
Our Strategy
Siyata’s primary focus is to increase sales
of our UV350 In-Vehicle device, rugged handhelds and cellular boosters in North America and other international markets. With approximately
20 million potential commercial vehicles to pursue in North America, per the United States Department of Transportation, Siyata believes
there is large growth potential in this market. Our strategy is to continue to partner with North American and other international wireless
carriers in order to interface with new potential customers and expand our customer base. Siyata sales are B2B and we will sell the hardware
to the wireless carrier (or their distributors), who will in turn sell the hardware to the fleet vehicle customer.
Siyata already has established distribution relationships
with several North American and international carriers and is generating revenue from selected countries outside of North America. Siyata
will continue to be strategic in selecting geographic markets with strong demand for our existing solutions. We will identify key distributors
in those new markets who can assist us with establishing a market presence.
Siyata is also willing to consider strategic
moves such as acquiring a complementary company if the right opportunity presents itself.
Our Pricing
For wireless carriers, they are free to price
the device how they choose. In most cases for significant sales opportunities the carriers are willing to subsidize the cost of the device
in order to secure the new activations with the associated monthly Average Revenue Per User (ARPU).
Even our unsubsidized full price is competitive
compared to other hardware solutions, but when our device is subsidized, the capital and operational expense benefits to customers compared
to other solutions are even greater.
Target Markets
Yellow School Buses
There are currently approximately 500,000 active
yellow school buses in North America, per the Smithsonian Institute. The majority of these use a two-way LMR radio for voice communications
between their dispatchers and the bus drivers. A small percentage of yellow school buses also use a tracking system so that the fleet
manager at the local school district headquarters can identify where the buses are at any time. Challenges for school districts include
controlling costs, maintaining legacy two-way radio devices and networks, and also the lack of communication with their drivers when
buses are beyond the county borders for field trips and sports events. The US Government is also encouraging school districts to incorporate
technology that is compatible with FirstNet. Siyata believes that UV350 In-Vehicle device with a Push-to-Talk over Cellular app, a Mobile
Device Management (MDM) app, and an emergency response app such as CrisisGo, combined with Siyata’s Wired Palm Mic, Roof Mounted
Antenna and In-line Cellular Booster provides a solution to these school districts. This will result in lower Capex and Opex, as well
as increased driver safety, increased functionality, and much improved cellular coverage. If the School District selects FirstNet as
its wireless carrier partner, then drivers can be assured of communicating with their dispatchers and with neighboring agencies in times
of emergencies. This availability of the new FirstNet network is causing many school districts to reconsider their communications solutions,
which will benefit Siyata. Siyata is conducting multiple trials and has already commenced sales in this sector.
Utility ‘Bucket Trucks’
Utility businesses in North America operate hundreds
of thousands of vehicles, including bucket trucks used by workers to fix or install hydro-lines on utility poles. These trucks require
the ability for their dispatchers to communicate with the workers in the truck. These trucks currently primarily incorporate a mix of
two-way LMR radio and Push-to-Talk over Cellular (PoC) to communicate. Many bucket trucks also utilize a second weatherproof speaker
mounted in the back of the truck in order for dispatchers to communicate with elevated workers operating on hydro lines. Communicating
with and relaying important information to workers operating on hydro lines can be challenging. Siyata has developed a custom solution
for dispatchers to communicate with the truck, and also an extra amplifier which can power the Utility’s pre-installed second speaker,
connected by a simple toggle switch. Siyata has conducted trials with this product with several utility trucks.
First Responder Vehicles
According to the Smithsonian Institute, there
are approximately 3 million active First Responder vehicles in the US. Most police vehicles contain “P25” two-way radio devices
for PTT voice communication. P25 devices are expensive, with each device costing thousands of USD, along with a ruggedized laptop computer
for database lookups which can cost over $2,000 USD. The opportunity for Siyata in the near term is to augment, rather than to replace
the P25 in vehicle two-way radio. Police agencies are traditionally less willing to abandon their legacy two-way radio technology. With
the launch and growth of FirstNet, police agencies are beginning to adopt FirstNet compatible PTT over cellular devices to enable neighboring
agencies to communicate during emergencies. While it is possible to enable P25 two-way radios to talk with PTT over cellular devices,
the UV350 is a dedicated PTT over cellular solution which delivers strong audio quality and dependability for first responders. Siyata
recognizes opportunities with police agencies in smaller rural communities where two-way radio coverage is more challenging. With Siyata’s
roof mounted antenna and in-line cellular booster, the UV350 device can be the solution that allows rural police vehicles to communicate
efficiently. Siyata is also currently conducting trials with several ambulance agencies.
Construction Vehicles
Construction companies present a strong customer
base for Siyata’s suite of products. Companies operating trucks that deliver gravel or remove soil from construction sites traditionally
have used commercial grade two-way LMR radios for voice communication. These vehicles occasionally also integrate technologies such as
Automatic Vehicle Location devices so that headquarters can monitor the locations of their trucks. For metro-wide two-way radio coverage,
these construction companies are typically paying a small two-way radio company between $20 and $40 USD per month per truck for the use
of their towers and repeaters for voice communications between headquarters and their drivers. If the trucks need to travel outside the
metro region then they are unable to communicate. The UV350 device delivers loud and clear audio communications while its relatively
small footprint fits securely in vehicles. The UV350 can replace the two-way radio devices used in construction company vehicles to make
driving simpler and safer. Siyata is currently conducting trials with several construction companies and has already begun sales in this
vertical.
Competition
We do not believe that we have any direct competitors
within the in-vehicle market category and we believe that no other Company offers an In-Vehicle Smartphone that is approved for sale
in North America by wireless carriers. To date, we are not aware of any directly competing devices that are in development.
We have several indirect competitors. Customers
could choose a handheld phone along with a professionally installed third party car kit. There are car kit providers who attempt to make
their car kits compatible with popular handheld phone models. By comparison, the UV350 device offers enhanced audio quality, safety,
and reception. Furthermore, the UV350 is always active and can be used in temperature extremes. Furthermore, the UV350 kit is one complete
solution from one supplier, as opposed to buying separately from two different companies and assembling a phone and a car kit that offers
no proven compatibility.
Our second indirect competitor are rugged tablets
that can be placed in a mount. The UV350 device offers better audio quality, better safety, better cellular reception, and it is always
on and ready to be used. Also, compared to a tablet, the UV350 can also make cellular calls including emergency 911 calls whereas the
tablet cannot as it is a data only device.
Our third indirect competitor is an In-Vehicle
Two-way Radio (LMR). Not only can the UV350 make phone calls which the LMR radio cannot, but the UV350 offers much better coverage due
to using the cellular network as opposed to a limited two-way radio network. And the UV350 can support downloadable Android apps and
can serve as a modem for IoT devices and as a Wi-Fi hotspot for further connectivity options and more.
Our fourth indirect competition is that global
leading LMR vendor has recently announced the TLK 150 In-Vehicle device which is a Push to Talk over Cellular device, compatible only
with its own Wave PTT application and does not feature any downloadable apps (fleet management, GPS tracking, live video feed, etc.)
nor the ability to make a phone call over the wireless network. This leading LMR vendor sells the TLK 150 In-Vehicle devices directly
to customers and through its dealer channel, but not through wireless carriers.
Within the Ruggedized handheld phone category,
we have a few direct competitors, including Sonim Technologies, Inc., Kyocera Corporation and Bullet Mobile using the CAT brand who produce
rugged handheld devices. Samsung Electronics Co. Ltd. also offer some of their consumer cellular devices in a more rugged form factor.
There are also several Chinese companies who manufacture rugged devices but are less active in the North American markets.
Within the Cellular Booster category, we have
several direct competitors, including Wilson Electronics, LLC, Nextivity Inc., and SureCall Company.
Employees
As of March 31, 2022, we had 27 full-time employees
and no part-time employees. Ten of our employees are located in Israel, with three performing sales functions, four performing research
and development functions, and four performing operations. Of the remaining 17 employees, 13 are located in Canada, with six performing
sales functions and nine performing operational functions and 4 are located in the USA, all performing sales functions.
Intellectual Property
We own two patents that we acquired from ClearRF,
as discussed below, and we have entered into several licensing agreements for the use of a trademark and certain patents.
Uniden® America Corporation
In December 2012, Signifi Mobile, the Company’s
wholly-owned subsidiary entered into a license agreement with Uniden® America Corporation, as amended (the “Uniden® Agreement”).
The Uniden® Agreement provides for the Company to use the trademark “Uniden®®”, along with associated designs
and trade dress to distribute, market and sell its In-Vehicle device, cellular signal booster and accessories during its term in North
America. The agreement includes renewal options up to December 31, 2022 and is subject to certain minimum royalties. The license agreement
is amortized on a straight-line basis over its five-year term.
Wilson Electronics LLC
Effective January 1, 2018, Signifi Mobile Inc.,
the Company’s wholly-owned subsidiary, entered into an agreement with Wilson Electronics, LLC to permit the Company to utilize
several of Wilson Electronics’ patents related to cellphone boosters (the “Wilson Agreement”). The Wilson Agreement
grants the Company an indefinite right to utilize its cellphone booster-related patents in exchange for paying Wilson Electronics, LLC
a royalty fee for boosters sold by the Company. The Wilson Agreement remains in force until the Wilson patents on the Booster products
expire.
Via Licensing Corporation
Effective June 8, 2018, the Company entered into
two separate licensing agreements with Via Licensing Corporation to utilize worldwide patents related to the coding and decoding of “android”
software as well as access and download within the “LTE/ 4G” network. This patent is for an initial period of 5 years and
can be extended for a further 5-year term. The Company has the right at any time during the term on any extension hereof, to terminate
these agreements upon providing 60 days advanced notice of termination. The quarterly royalty fees are based solely on product sales
and is a percentage formula based upon the number of units sold, the country manufactured and the country location of the end customer.
There are no minimum royalty fees payable according to the agreement.
e Wave Mobile Ltd.
Effective October 1, 2017, the Company entered
into an Asset Purchase Agreement with eWave Mobile Ltd. (“eWave”) for the purchase of certain distribution rights and contracts
in connection with the right to sell and distribute in Israel certain cellular devices for the push to talk market (the “eWave
Supplies”) in exchange for $700,000 and the Company issuing an amount equal to USD$700,000 to the Company. Additionally, the Company
shall pay eWave 50% of the net profit from all sales the Company earns from the eWave Supplies from 2017 – 2018, and then 25% thereafter.
Clear RF, LLC
On March 31, 2021, the Company’s indirectly
and wholly-owned subsidiary ClearRF Nevada Inc. acquired all of the issued and outstanding interests of Clear RF, LLC, or ClearRF, a
Washington State limited liability company, for a total purchase price of $700,000 in a combination of cash and common shares. ClearRF
produces M2M (machine-to-machine) cellular amplifiers for commercial and industrial M2M applications and offers patented direct connect
cellular amplifiers and patented auto gain & oscillation control designed for M2M and “internet-of-things” (IoT) applications.
Two patents (described below) held by ClearRF were subsequently transferred and assigned to Signifi Mobile Inc. following the closing
of this acquisition.
|
i. |
RF Passive Bypass technology enables tethered devices to communicate through the amplifier network,
even if the amplifier loses power, or when the signal is not required, a key differentiator amongst competitors, in particular for
mission-critical applications and first responder vehicles that require constant clear cellular coverage and connectivity. |
|
ii. |
Auto Gain & Oscillation Control detects the level of incoming signal strength and self-adjusts
output power to ensure maximum signal strength. This feature is vital for telematics (mobile) M2M applications because the amplifier
will be in constant motion and will require periodic self-adjustment based on changing incoming signal environment. |
Seasonality
The Company does not experience any effects of
seasonality it its business. Our products are designed to function at full capacity under all weather conditions and therefore, we do
not experience any shifts in our sales patterns.
Facilities
The Company’s headquarters are located
at 1001 Lenoir Street, Suite A-414, Montreal, QC H4C 2Z6, with approximately 4,472 square feet of space. The Company entered into a lease
agreement for its property for a five-year term, beginning on July 1, 2020 (the “Lease”). The Lease is set to expire on May
31, 2024. Under the Lease, the Company pays Net Rent of $12.00 per square foot per annum, approximately $53,664 annum, payable in monthly
equal installments.
Legal Proceedings
From time to time, we are involved in litigation
or other legal proceedings incidental to our business. We are not currently a party to any litigation the outcome of which, if determined
adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating
results, cash flows or financial condition.
Going Concern
Our auditor has included a “going concern”
explanatory paragraph in its report on our consolidated financial statements for the fiscal year ended December 31, 2020, expressing
substantial doubt about our ability to continue as an ongoing business for the next twelve months. Our consolidated financial statements
do not include any adjustments that may result from the outcome of this uncertainty. If we cannot secure the financing needed to continue
as a viable business, our shareholders may lose some or all of their investment in us.
Corporate History and Structure
The Company was incorporated on October 15, 1986
as Big Rock Gold Ltd. as a corporation under the Company Act of British Columbia. On April 5, 1988, the Company changed its name to International
Cruiseshipcenters Corp. On June 24,1991, the Company changed its name to Riley Resources Ltd. Effective January 23, 1998, the Company
consolidated its share capital on an eight-to-one basis and changed its name to International Riley Resources Ltd. Effective November
22, 2001, the Company consolidated its share capital on a five-to-one basis and changed its name to Wind River Resources Ltd. On January
3,2008, the Company changed its name to Teslin River Resources Corp.
On July 24, 2015, Teslin River Resources Corp,
completed a reverse acquisition by way of a three-cornered amalgamation, pursuant to which the Company acquired certain telecom operations
of an Israel-based cellular technology company and changed its name to Siyata Mobile Inc.
On June 7, 2016, the Company acquired all of
the issued and outstanding shares of Signifi Mobile Inc.
In March 2021, the Company acquired, through
a wholly owned subsidiary formed by Signifi, all the outstanding units of Clear RF LLC (“Clear RF”).
The Company was registered with the TSXV under
the symbol SIM, commenced trading on OTCQX under the symbol SYATF from May 11, 2017 until September 25, 2020, at which time the Company’s
common shares were listed only on the Nasdaq Capital Market.
The following diagram illustrates our corporate
structure as of the date of this prospectus:
Recent Developments
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● |
We have experienced an increase of sales of our cellular boosters as more people are working remotely
as a result of the COVID-19 pandemic but our overall sales during the pandemic have remained similar to its sales in 2019 during
this time period with a shift towards increased sales in North America in the first responder market. It is not possible for us to
predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or ability to raise funds.
We plan to address any going concerns from the pandemic by continuing to increase its sales in North America is a substantial larger
market than we have sold in the past. In addition, our cellular distribution business should remain strong during this time since
more individuals will continue to work from home. We also expect the proceeds from this offering to allow us to cover any shortfall
that we may incur until the pandemic is no longer a worldwide issue. In addition, we believe that our cellular booster business remains
strong during the COVID-19 pandemic as more individuals continue to work from home, requiring improved cellular reception. |
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● |
On April 8, 2021, the British Columbia Securities Commission (“BCSC”) issued an order
to cease the trading in our common shares because we had not timely filed with the BCSC our annual audited financial statements for
the year ended December 31, 2020, our annual management’s discussion and analysis for the year ended December 31, 2020, the
annual information form for the year ended December 31, 2020 and the certification of annual filings for the year ended December
31, 2020. We subsequently filed the noted items and the cease trading order was revoked by the BCSC on July 8, 2021. We are currently
in compliance with all BCSC requirements as of the date of this prospectus. |
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● |
On August 20, 2021, the British Columbia Securities Commission (“BCSC”) issued an order
to cease the trading in our common shares because we had not timely filed with the BCSC our interim financial report for the period
ended June 30, 2021, our interim management’s discussion and analysis for the period ended June 30, 2021 and the certification
of interim filings for the period ended June 30, 2021. We subsequently filed the noted items and the cease trading order was revoked
by the BCSC on October 15, 2021. We are currently in compliance with all BCSC requirements as of the date of this prospectus. |
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● |
On October 27, 2021, we entered into
a securities purchase agreement relating to the purchase and sale of a senior secured convertible note (the “Lind Partners
Note”) for gross proceeds of USD$6,000,000 (the “Purchase Agreement”) with Lind Global Partners II, LP, an
investment fund managed by The Lind Partners, a New York based institutional fund manager. Proceeds were used to repay and terminate
existing convertible notes, as well as to pay certain fees and costs associated with the transaction. The Purchase Agreement
provides for, among other things, the issuance of a USD$7,200,000 note with a 24-month maturity, 0% annual interest rate, and
a fixed conversion price of USD$10.00 per share (“Conversion Price”) of our common shares. We are required to make
principal payments in 18 equal monthly installments commencing 180 days after funding (“Repayment”). At our discretion,
the Repayments can be made in: (i) cash; (ii) common shares (after common shares are registered) (the “Repayment Shares”);
or a combination of both. Repayment Shares will be priced at 90% of the average of the five lowest daily volume weighted average
prices (“VWAPs”) during the 20 trading days before the issuance of the common shares (the “Repayment Price”).
Further, the Lind Partners Note provides for a pricing floor of $2.00 per common share (the “Repayment Share Price Floor”)
such that Repayment Shares shall be priced at 90% of the average of the five lowest daily VWAPs during the 20 trading days before
the issuance of the common shares, subject to the Repayment Share Floor Price provided, however, that the Repayment Share Price
Floor shall not be applied once we obtain stockholder approval as required by the Nasdaq at our upcoming Annual General Meeting
of shareholders. As of December 3, 2021, we incurred an event of default under the terms of the Lind Partners Note. Upon the
occurrence and during the continuance of an “Event of Default”, the holder may at any time at its option: (1) declare
that Interest Upon Default Amount (15%) has commenced and (2) exercise all other rights and remedies available to it under the
transaction documents; provided, however, that upon the occurrence of an Event of Default described above, the holder, in its
sole and absolute discretion, may: (a) from time-to-time demand that all or a portion of the outstanding principal amount be
converted into common shares at the lower of (i) the then-current Conversion Price and (ii) 80% of the average of the 3 lowest
daily Volume Weighted Average Prices during the 20 Trading Days prior to the delivery by the holder of the applicable notice
of conversion or (b) exercise or otherwise enforce any one or more of the holder’s rights, powers, privileges, remedies
and interests under the Lind Partners Note, the transaction documents or applicable law. No course of delay on the part of the
holder shall operate as a waiver thereof or otherwise prejudice the rights of the holder. The event of default was cured on December
7, 2021 when the Company’s market capitalization increased to an amount over $20,000,000. If the Company issues any Equity
Interests, other than Exempted Securities, for aggregate proceeds to the Company of greater than $10,000,000, excluding offering
costs or other expenses, unless otherwise waived in writing by and at the discretion of Lind Partners, the Company will direct
20% of such proceeds to reduce the principal balance of the Lind Note. Based on a $20,000,000 offering, 20% of said proceeds,
or $4,000,000, will be used by the Company to reduce the principal balance of the Lind Note. If the Company issues any equity
interests issued, subject to certain exemptions, at an effective price per share that is less than the exercise price of the
Lind Warrant then in effect or without consideration, then the exercise price of the Lind Warrants shall be reduced to a price
equal to the consideration per share paid for such additional common shares. Based on this offering at $2.30 per share, the Lind
Warrants would be repriced to $2.30. Prior to this offering, the exercise price of the Lind Warrants is $4.00 per share. If the
Company issues any equity interests, subject to certain exemptions, at an effective price per share that is less than the conversion
price of the Lind Notes then in effect or without consideration, then the conversion price of the Lind Notes shall be reduced
to a price equal to the consideration per share paid for such additional common shares. Based on this offering at $2.30 per common
share, the conversion price of the Lind Note would be repriced to $2.30, which would result in 3,130,435 shares to be issued
upon conversion of the full $7,200,000 Lind Note. Prior to this offering, the conversion price is $10.00 per share and the shares
issued upon conversion of the full $7,200,000 Lind Note would be 720,000.
See “Description of Share Capital – The Lind Partners
Senior Secured Convertible Note and Warrant” for more information. |
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● |
On October 6, 2021, Siyata Mobile completed a major milestone and entered into a working partnership
with a global leading U.S. distributor (“Leading U.S. Distributor”) for its recently launched SD7 mission-critical push-to-talk
(MCPTT) ruggedized handheld device. The companies signed an addendum to their Master Service Agreement (MSA) appointing the Leading
U.S. Distributor as a non-exclusive SD7 marketing and distribution partner. The Leading U.S. Distributor, the leading global land
mobile radio (LMR) vendor, will be marketing the SD7 both in North America as well as in international markets, selling both directly
and in partnership with us. |
Corporate
Information
Our principal executive offices and headquarters
are located at 1001 Lenoir Street, Suite A-414, Montreal, QC H4C 2Z6 and our phone number is +1-514-500-1181. We maintain a corporate
website at www.siyatamobile.com. The information contained in, or accessible from, our website or any other website does not constitute
a part of this prospectus.
Nasdaq Listing
Our common shares are listed on the Nasdaq Capital
Market under the symbol “SYTA” and our Prior Warrants are listed on the Nasdaq Capital Market under the symbol “SYTAW.”
We currently do not plan to apply to list any other of the securities on any national securities exchange.
The Securities the Company May Offer
The Company may sell, in one or more offerings
pursuant to this prospectus and the applicable prospectus supplement, up to $100,000,000 aggregate amount of common shares, Warrants,
Rights, Purchase Contracts, Debt Securities and Units listed on the cover page of this prospectus.
RISK FACTORS
An investment in our securities involves a high
degree of risk. Before making an investment in our securities, you should carefully consider all of the information included in this
prospectus, the risk factors presented in “Item 3. Key Information—3.D. Risk Factors” of the Form 20-F, which is incorporated
herein by reference, and all of the other information included in any prospectus supplement and other documents that have been incorporated
by reference in this prospectus and any prospectus supplement, as well in our other filings with the Commission. Please see the sections
of this prospectus entitled “Cautionary Note Regarding Forward-Looking Statements” and “Incorporation of Certain Documents
by Reference.” The occurrence of one or more of those risk factors could adversely impact our business, financial condition or
results of operations.
OFFER STATISTICS AND EXPECTED
TIMETABLE
We may sell from time to time pursuant to this
prospectus (as may be detailed in a prospectus supplement) an indeterminate number of common shares, Warrants, Rights, Purchase Contracts,
Debt Securities and/or Units comprised of any of the foregoing securities as shall have a maximum aggregate offering amount of $100,000,000.
The actual price per share or per security of the securities that we will offer pursuant hereto will depend on a number of factors that
may be relevant as of the time of offer. See “Plan of Distribution.”
REASONS FOR THE OFFER AND
USE OF PROCEEDS
We are raising capital to expand and grow our
business. Unless otherwise indicated in an accompanying prospectus supplement, the net proceeds from our sale of securities under this
prospectus will be used for, in no particular order of magnitude, capital expenditures, expansion of our marketing efforts, investments
in or advances to our subsidiaries, acquisitions of complementary businesses, debt reduction or debt refinancing, capital expenditures,
working capital and other general corporate purposes. When securities are offered, the prospectus supplement relating thereto will set
forth our intended use of the net proceeds that we receive from the sale of such securities.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization and indebtedness will be set
forth in a prospectus supplement to this prospectus or in a report on Form 6-K subsequently filed with the Commission and specifically
incorporated herein by reference.
DESCRIPTION OF SHARE CAPITAL
For a description of our share capital, see “ITEM
5. “Operating And Financial Review And Prospects – B. Liquidity and Capital Resources – SHARE CAPITAL” in the
Company’s Annual Report on Form 20-F.
Common Shares
For a description of our common shares, see “Description
of common shares”, below.
Warrants Issued January 11, 2022
Overview
The following summary of certain terms and provisions
of the Warrants issued January 11, 2022 (the “January 22 Warrants”) is not complete and is subject to, and qualified in its
entirety by, the provisions of the warrant agency agreement between Computershare Inc. and Computershare Trust Company, N.A. (together,
the “Warrant Agent”) and the Company (the “Warrant Agreement”), and the form of the January 22 Warrants, both
of which are filed as exhibits to the registration statement relating to the offer and sale of such warrants, which is not incorporated
herein.
The January 22 Warrants entitle the registered
holder to purchase common shares at a price equal to $2.30 per share, subject to adjustment as discussed below, immediately following
the issuance of such warrant and terminating at 5:00 p.m., New York City time, five years after the closing of this offering.
The exercise price and number of common shares
issuable upon exercise of the January 22 Warrants may be adjusted in certain circumstances, including in the event of a stock dividend
or recapitalization, reorganization, merger or consolidation. However, the January 22 Warrants will not be adjusted for issuances common
shares at prices below its exercise price.
Exercisability. The January 22 Warrants
are exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance.
The January 22 Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices
of the Warrant Agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price, by certified or official bank check payable to us, for the number of warrants being exercised.
Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and
current prospectus relating to common shares issuable upon exercise of the Warrants until the expiration of the January 22 Warrants.
If we fail to maintain the effectiveness of the registration statement and a current prospectus relating to the common shares issuable
upon exercise of the January 22 Warrants, the holders of the January 22 Warrants will have the right to exercise the January 22 Warrants
solely via a cashless exercise feature provided for in the January 22 Warrants, until such time as there is an effective registration
statement and a current prospectus.
Exercise Limitation. A holder may not
exercise any portion of a January 22 Warrant to the extent that the holder, together with its affiliates and any other person or entity
acting as a group, would own more than 4.99% of the outstanding common shares after exercise, as such percentage ownership is determined
in accordance with the terms of the January 22 Warrants, except that upon prior notice from the holder to us, the holder may waive such
limitation up to a percentage not in excess of 9.99%.
Exercise Price. The exercise price per
whole common share purchasable upon exercise of the January 22 Warrants is no less than 100% of public offering price of the Units offered
by the Company in this offering. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and
distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions
of assets, including cash, stock or other property to our stockholders.
Fractional Shares. No fractional common
shares will be issued upon exercise of the January 22 Warrants. As to any fraction of a share which the holder would otherwise be entitled
to purchase upon such exercise, the Company will, 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 nearest whole share.
Transferability. Subject to applicable
laws, the January 22 Warrants may be offered for sale, sold, transferred or assigned without our consent. However, the January 22 Warrants
will not trade on the Nasdaq Capital Market and no trading market is expected to develop for the Warrants.
Warrant Agent; Global Certificate. The
January 22 Warrants will be issued in registered form under a warrant agency agreement between the Warrant Agent and us. The January
22 Warrants were will initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on
behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed
by DTC.
Fundamental Transactions. In the event
of a fundamental transaction, as described in the January 22 Warrants and generally including any reorganization, recapitalization or
reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common shares, the holders of the January
22 Warrants will be entitled to receive the kind and amount of securities, cash or other property that the holders would have received
had they exercised the January 22 Warrants immediately prior to such fundamental transaction.
Rights as a Stockholder. The January 22
Warrant holders do not have the rights or privileges of holders of common shares or any voting rights until they exercise their warrants
and receive common shares. After the issuance of common shares upon exercise of the January 22 Warrants, each holder will be entitled
to one vote for each share held of record on all matters to be voted on by shareholders.
Governing Law. The January 22 Warrants
and the Warrant Agreement are governed by New York law.
Prior Warrants
Overview. Our warrants that were issued
in conjunction with our initial public offering on the Nasdaq Capital Market (“Prior Warrants”) were listed on the Nasdaq
Capital Market and currently trade under the symbols “SYTAW.”
The following summary of certain terms and provisions
of the Prior Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the warrant agency agreement
between us and the Warrant Agent, and the form of Prior Warrants, both of which are filed as exhibits to the registration statement for
that offering which is not incorporated herein by reference.
The Prior Warrants entitle the registered holder
to purchase common shares at a price equal to $6.85 per share, subject to adjustment as discussed below, immediately following the issuance
of such warrant and terminating at 5:00 p.m., New York City time, five years after the closing of the initial public offering in September,
2020.
The exercise price and number of common shares
issuable upon exercise of the Prior Warrants may be adjusted in certain circumstances, including in the event of a stock dividend or
recapitalization, reorganization, merger or consolidation. However, the Prior Warrants will not be adjusted for issuances of common shares
at prices below its exercise price.
Exercisability. The Prior Warrants are
exercisable at any time after their original issuance and at any time up to the date that is five years after their original issuance.
The Prior Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the
Warrant Agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price, by certified or official bank check payable to us, for the number of Prior Warrants being exercised.
Under the terms of the Warrant Agreement, we must use our best efforts to maintain the effectiveness of the registration statement and
current prospectus relating to common shares issuable upon exercise of the Prior Warrants until the expiration of the warrants. If we
fail to maintain the effectiveness of the registration statement and current prospectus relating to the common shares issuable upon exercise
of the Prior Warrants, the holders of the Prior Warrants shall have the right to exercise the Prior Warrants solely via a cashless exercise
feature provided for in the Prior Warrants, until such time as there is an effective registration statement and current prospectus.
Exercise Limitation. A holder may not
exercise any portion of a Prior Warrant to the extent that the holder, together with its affiliates and any other person or entity acting
as a group, would own more than 4.99% of the outstanding common shares after exercise, as such percentage ownership is determined in
accordance with the terms of the warrant, except that upon prior notice from the holder to us, the holder may waive such limitation up
to a percentage not in excess of 9.99%.
Exercise Price. The exercise price per
whole common share purchasable upon exercise of the Prior Warrants is no less than 100% of public offering price of the Units that were
previously offered by the Company. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and
distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares and also upon any distributions
of assets, including cash, stock or other property to our stockholders.
Fractional Shares. No fractional common
shares will be issued upon exercise of the Prior Warrants. As to any fraction of a share which the holder would otherwise be entitled
to purchase upon such exercise, the Company will round up or down, as applicable, to the nearest whole share.
Transferability. Subject to applicable
laws, the Prior Warrants may be offered for sale, sold, transferred or assigned without our consent.
Warrant Agent; Global Certificate. The
Prior Warrants were issued in registered form under a warrant agency agreement between the Warrant Agent and us. The Prior Warrants were
initially represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository
Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Fundamental Transactions. In the event
of a fundamental transaction, as described in the Prior Warrants and generally including any reorganization, recapitalization or reclassification
of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming
the beneficial owner of 50% of the voting power represented by our outstanding common shares, the holders of the Prior Warrants will
be entitled to receive the kind and amount of securities, cash or other property that the holders would have received had they exercised
the Prior Warrants immediately prior to such fundamental transaction.
Rights as a Stockholder. The Prior Warrant
holders do not have the rights or privileges of holders of common shares or any voting rights until they exercise their warrants and
receive common shares. After the issuance of common shares upon exercise of the Prior Warrants, each holder will be entitled to one vote
for each share held of record on all matters to be voted on by shareholders.
Governing Law. The Prior Warrants and
the warrant agency agreement are governed by New York law.
The Lind Partners Senior Secured Convertible
Note and Warrant
On October 27, 2021, we entered into a securities
purchase agreement relating to the purchase and sale of a senior secured convertible note (the “Lind Partners Note”) for
gross proceeds of USD$6,000,000 (the “Purchase Agreement”) with Lind Global Partners II, LP, an investment fund managed by
The Lind Partners, a New York based institutional fund manager. Proceeds were used to repay and terminate existing convertible notes,
as well as to pay certain fees and costs associated with the transaction. The Purchase Agreement provides for, among other things, the
issuance of a USD$7,200,000 note with a 24-month maturity, 0% annual interest rate, and a fixed conversion price of USD$10.00 per common
share (“Conversion Price”). We are required to make principal payments in 18 equal monthly installments commencing 180 days
after funding (“Repayment”). At our discretion, the Repayments can be made in: (i) cash; (ii) common shares (after common
shares are registered) (the “Repayment Shares”); or a combination of both. Repayment Shares will be priced at 90% of the
average of the five lowest daily volume weighted average prices (“VWAPs”) during the 20 trading days before the issuance
of the common shares (the “Repayment Price”). Further, the Lind Partners Note provides for a pricing floor of $2.00 per common
share (the “Repayment Share Price Floor”) such that Repayment Shares shall be priced at 90% of the average of the five lowest
daily VWAPs during the 20 trading days before the issuance of the common shares, subject to the Repayment Share Floor Price provided,
however, that the Repayment Share Price Floor shall not be applied once we obtain stockholder approval as required by the Nasdaq at our
upcoming Annual General Meeting of shareholders. As of December 3, 2021, we incurred an event default under the terms of the Lind Partners
Note. Upon the occurrence and during the continuance of an “Event of Default”, the holder may at any time at its option:
(1) declare that Interest Upon Default Amount (15%) has commenced and (2) exercise all other rights and remedies available to it under
the transaction documents; provided, however, that upon the occurrence of an Event of Default described above, the holder, in its sole
and absolute discretion, may: (a) from time-to-time demand that all or a portion of the outstanding principal amount be converted into
common shares at the lower of (i) the then-current Conversion Price and (ii) 80% of the average of the 3 lowest daily Volume Weighted
Average Prices during the 20 Trading Days prior to the delivery by the holder of the applicable notice of conversion or (b) exercise
or otherwise enforce any one or more of the holder’s rights, powers, privileges, remedies and interests under the Lind Partners
Note, the transaction documents or applicable law. No course of delay on the part of the holder shall operate as a waiver thereof or
otherwise prejudice the rights of the holder. The event of default was cured on December 7, 2021 when the Company’s market capitalization
increased to an amount over $20,000,000.
The Company will have the right to buy-back the
outstanding face value of the Lind Partners Note at any time with no penalty (“Buy-Back Right”). Should the Company exercise
its Buy-Back Right, Lind will have the option to convert up to 25% of the face value of the Note at the lesser of the Conversion Price
or Repayment Price. Additionally, the Lind Partners Note ranks senior to other Company debt, excluding certain debt facilities, and is
secured over Company assets, as more fully detailed in the Purchase Agreement and Note.
Further, the Purchase Agreement provides that
Lind will also receive a common shares purchase warrant to purchase up to 2,142,857 shares of the Company’s common shares (“Lind
Partners Warrant”). The Lind Partners Warrant may be exercisable with cash payment for 60 months with an exercise price of USD$4.00
per common share and may be exercised on a cashless basis in the event that a registration statement covering the underlying common shares
is not deemed effective. Additionally, in the event that, on any day following the date that is 120 calendar days after the Issue Date,
the Holder is not able to exercise all or any portion of the Lind Partners Warrant, the Company shall, at the Holder’s election,
within 90 calendar days following receipt of a written notice from the Holder (the “Alternate Issuance Notice”) be required,
with respect to all or any portion of the Lind Partners Warrant, as applicable, that cannot be exercised, to pay to the Holder an amount
of cash equal to the Alternate Issuance Value (as defined below) of the portion of the Lind Partners Warrant that is not exercisable
due to the Issuance Cap (as defined below) on the date of such Alternate Issuance Notice (the “Alternate Issuance Shares”).
In the event of any Alternate Issuance, the Exercise Shares shall be reduced by the amount of Alternate Issuance Shares. As defined in
the Lind Partners Warrant, the “Alternate Issuance Value” means a value equal to the number of common shares as to which
the Lind Partners Warrant is sought to be exercised (as indicated on the Exercise Notice), multiplied by a per share price equal to the
VWAP for the Trading Day immediately preceding the intended date of exercise minus the Exercise Price.
If the Company issues any Equity Interests, other
than Exempted Securities, for aggregate proceeds to the Company of greater than $10,000,000, excluding offering costs or other expenses,
unless otherwise waived in writing by and at the discretion of Lind Partners, the Company will direct 20% of such proceeds to reduce
the principal balance of the Lind Note. Based on this $20,000,000 offering, 20% of said proceeds, or $4,000,000, will be used by the
Company to reduce the principal balance of the Lind Note. If the Company issues any equity interests, subject to certain exemptions,
at an effective price per share that is less than the exercise price of the Lind Warrant then in effect or without consideration, then
the exercise price of the Lind Warrants shall be reduced to a price equal to the consideration per share paid for such additional common
shares. Based on this capital raise at $2.300 per share, the Lind Warrants would be repriced to $2.30. Prior to this offering, the exercise
price of the Lind Warrants is $4.00 per share. If the Company issues any equity interests issued, subject to certain exemptions, at an
effective price per share that is less than the conversion price of the Lind Notes then in effect or without consideration, then the
conversion price of the Lind Notes shall be reduced to a price equal to the consideration per share paid for such additional common shares.
Based on the offering at $2.30 per common share, the conversion price of the Lind Note would be repriced to $2.30, which would result
in 3,130,435 shares to be issued upon conversion of the full $7,200,000 Lind Note. Prior to this offering, the conversion price is $10.00
per share and the shares issued upon conversion of the full $7,200,000 Lind Note would be 720,000.
Both the Lind Partners Note and the Lind Partners
Warrant contain certain anti-dilution protection in certain circumstances. In connection with the transaction, the Company filed a registration
statement covering the common shares underlying the Lind Partners Note and Lind Partners Warrant. The Lind Partners Note and Lind Partners
Warrant also include a common share issuance cap preventing the Company from issuing Conversion Shares or Warrant Shares, as the case
may be, in the event that any such issuance would violate any issuance restrictions of the Trading Market, after taking into account
all of the Investor Shares (the “Issuance Cap”), as more fully detailed in the Lind Partners Note and Lind Partners Warrant.
Concurrently with the execution of the Purchase
Agreement, the Company, its subsidiaries and Lind entered into certain security agreements and guarantees as more fully detailed in the
Purchase Agreement.
The Securities Agreement requires that the Company
shall hold a special meeting of shareholders (which may also be at the annual meeting of shareholders) on or before the 90th calendar
day following the date hereof for the purpose of obtaining the Shareholder Approval; provided, however, such 90 calendar days shall be
increased to 120 calendar days in the event the Company receives comments to its proxy statement from the SEC, with the recommendation
of the Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders in connection therewith
in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their
proxies in favor of such proposal. If the Company does not obtain Shareholder Approval at the first meeting, the Company shall call a
meeting every four months thereafter to seek Shareholder Approval until the date the Shareholder Approval is obtained. Prior to any such
shareholder meeting, the Company shall timely file a proxy circular pursuant to NI 51-102 in compliance in all material respects with
the provisions of the Company’s constating documents and all applicable Law.
The Purchase Agreement contains customary representations
and warranties of the Company and Lind. In addition, the Note contains restrictive covenants and event of default provisions that are
customary for transactions of this type.
Lind may sell all, some or none of the common
shares issuable upon conversion of the Lind Partners Note or exercise of the Lind Partners Warrant pursuant to a registration statement
declared effective on December 3, 2021.
DESCRIPTION OF COMMON SHARES
The following description of our common shares
and provisions of our articles are summaries and do not purport to be complete. The following summary is not complete and is qualified
in its entirety by our articles and notice of articles, and the actual terms and conditions of such shares.
We are authorized to issue an unlimited number
of common shares with no par value. We have 15,120,524 common shares issued and outstanding as of June 30, 2022, excluding 1,183,023
common shares that may be granted in the future under our equity incentive plan. We currently only have one class of issued shares, being
the common shares, which have identical rights in all respects and rank equally with one another. On September 20, 2020, the Company
consolidated our issued and outstanding common shares on a 145-to-1 basis.
Our common shares are listed on the Nasdaq Capital
Market and currently trade under the symbols “SYTA.”
All of our issued and outstanding common shares
are fully paid and non-assessable. Unless the board of directors determine otherwise, each holder of our common shares will not receive
a certificate in respect of such common shares. Our shareholders may freely hold and vote their common shares.
Subject to the provisions of the Business
Corporations Act (British Columbia) (“BCBCA”) and our articles regarding redemption and purchase of the shares, the directors
have general and unconditional authority to allot (with or without confirming rights of renunciation), grant options over or otherwise
deal with any unissued shares to such persons, at such times and on such terms and conditions as they may decide. Such authority could
be exercised by the directors to allot shares which cany rights and privileges that are preferential to the rights attaching to common
shares. No share may be issued at a discount except in accordance with the provisions of the BCBCA. The directors may refuse to accept
any application for shares, and may accept any application in whole or in part, for any reason or for no reason.
The holders of common shares are entitled to
vote at all meetings of the shareholders of the Company except meetings at which only holders of a specified class or series of shares
are entitled to vote. The holders of common shares are entitled to receive dividends as and when declared by the Board of Directors.
After payment of all outstanding debts, the holders of common shares shall be entitled to receive the remaining property of the Company
upon the liquidation, dissolution or winding-up thereof.
DESCRIPTION OF WARRANTS
We are registering Warrants to purchase Debt
Securities, common shares, or any combination thereof. We may issue Warrants independently or together with any other securities offered
by a prospectus supplement. Warrants may be attached to or separate from such securities and may or may not be transferable. Each series
of Warrants will be issued under a separate warrant agreement we will enter into with a warrant agent specified in the applicable prospectus
supplement. The warrant agent will act solely as our agent in connection with the warrants of a particular series and will not assume
any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. In connection with any Warrants,
we may enter into a standby underwriting agreement with one or more underwriters pursuant to which the underwriters will agree to purchase
any securities underlying such Warrants that remain unpurchased upon the expiration of such Warrants. The issuance of Warrants is subject
to our articles and notice of articles, the BCBCA, and the prior approval of the board of directors and, if applicable, shareholders
at a general meeting.
To the extent appropriate, the applicable prospectus
supplement will describe the specific terms of the Warrants offered thereby, including the following:
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the title of the Warrants; |
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the aggregate number of the Warrants; |
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the price or prices, if any, at which the Warrants will be issued; |
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the currency or currency units in which the offering price, if any, and the
exercise price, are payable; |
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the extent to which the Warrants are not transferable; |
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the designation, number or principal amount and terms of the Debt Securities
and/or common shares purchasable upon exercise of the Warrants; |
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the designation and terms of the other securities, if any, with which the Warrants
are issued and the number of Warrants issued with each security; |
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the date, if any, on and after which the Warrants and the related underlying
securities will be separately transferable; |
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the price at which each underlying security purchasable upon exercise of the
Warrants may be purchased; |
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the date on which the right to exercise the Warrants will commence and the date
on which that right will expire or, if you may not continuously exercise the warrants throughout the period, the specific date or
dates on which you may exercise the Warrants; |
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whether the Warrant will be issued in definitive or global form or in any combination
of these forms, although, in any case, the form of a Warrant included in a Unit will correspond to the form of the unit and of any
security included in that Unit; |
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the identity of the warrant agent or of any other depositaries, execution or
paying agents, transfer agents, registrars or other agents; |
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the maximum or minimum number of the Warrants that may be exercised at any one
time; |
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information with respect to book-entry procedures, if any; |
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in connection with Warrants denominated as Rights, the extent of any over-subscription
privilege with respect to unsubscribed securities; |
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the anti-dilution provisions of the Warrants, if any; |
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any redemption or call provisions; |
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whether the Warrants may be sold separately or with other securities as part of Units; |
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any material Canadian and United States federal income tax consequences; |
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the material terms of any standby underwriting arrangement entered into by us
in connection with any Warrants; and |
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any other terms of the Warrants, including terms, procedures and limitations relating to the transferability,
exchange and exercise of the Warrants. |
DESCRIPTION
OF RIGHTS
We may issue to our shareholders Rights to purchase
our common shares, or Debt Securities. The following description sets forth certain general terms and provisions of the Rights that we
may offer pursuant to this prospectus, or any combination of those securities in the form of Units, as described in the applicable prospectus
supplement. The particular terms of the Rights and the extent, if any, to which the general terms and provisions may apply to the Rights
so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the Rights, rights agreement
(if any) or Rights certificates described in a prospectus supplement differ from any of the terms described below, then the terms described
below will be deemed to have been superseded by that prospectus supplement. We encourage you to read the applicable rights agreement
(if any) and Rights certificate for additional information before you decide whether to purchase any of our Rights.
Rights may be issued independently or together
with any other security offered by this prospectus, or any combination of those securities in the form of Units, as described in the
applicable prospectus supplement, and may or may not be transferable by the shareholder receiving the Rights in the Rights offering.
Each series of Rights may be issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights
agent. The Rights agent, if any, will act solely as our agent in connection with the certificates relating to the rights of the series
of certificates 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. In connection with any Rights offering, we may enter into a standby underwriting agreement with one or
more underwriters pursuant to which the underwriter will purchase any securities that remain unsubscribed for upon completion of the
Rights offering, or offer these securities to other parties who are not our shareholders. A copy of the form of Rights certificate will
be filed with the Commission each time we issue Rights, and you should read that document for provisions that may be important to you.
The issuance of Rights is subject to our articles and notice of articles, the BCBCA, the prior approval of the board of directors and,
if applicable, shareholders at a general meeting.
The applicable prospectus supplement relating
to any Rights will describe the terms of the offered Rights, including, where applicable, the following:
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the date for determining the shareholders entitled to the Rights distribution; |
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the exercise price for the Rights; |
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the number of Rights issued to each shareholder and the aggregate number of
Rights issued; |
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the exercise price payable for each common share or Debt Security upon the exercise
of the Rights; |
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the number and terms of the common shares or Debt Securities which may be purchased
per Right; |
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the extent to which the Rights are transferable and the date, if any, on and
after the Rights may be separately transferred; |
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the date on which the right to exercise the Rights will commence and the date
on which the right to exercise the Rights will expire; |
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the method by which holders of Rights will be entitled to exercise; |
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the conditions to the completion of the offering; if any; |
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the withdrawal, termination and cancellation rights, if any; |
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the extent to which the Rights include an over-subscription privilege with respect
to unsubscribed securities; |
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the material terms of any standby underwriting arrangement entered into by us
in connection with the Rights offering; and |
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any other terms of the Rights, including terms, procedures and limitations relating
to the exchange and exercise of the Rights; |
Holders may exercise rights as described in the
applicable prospectus supplement. Upon receipt of payment and the Rights certificate properly completed and duly executed at the corporate
trust office of the rights agent or any other office indicated in the prospectus supplement, we will, as soon as practicable, forward
the common shares or other securities, as applicable, purchasable upon exercise of the Rights. The issuance of rights agreements is subject
to our articles and notice of articles, the BCBCA, and the prior approval of the board of directors and shareholders at a general meeting.
Rights Agent
The Rights agent (if any) for any Rights we offer
will be set forth in the applicable prospectus supplement.
DESCRIPTION OF PURCHASE
CONTRACTS
We may issue Purchase Contracts, including contracts
obligating holders to purchase from us, and obligating us to sell to the holders, a specified number of common shares, Warrants, Rights,
Debt Securities, or any combination thereof, at a future date or dates. The price per security of the securities and the number of securities
may be fixed at the time the Purchase Contracts are issued or may be determined by reference to a specific formula set forth in the Purchase
Contracts. The Purchase Contracts also may require us to make periodic payments to the holders of the Purchase Contracts, or vice
versa, and those payments may be unsecured or refunded on some basis. The Purchase Contracts may require holders to secure their
obligations thereunder in a specified manner and may provide for the prepayment of all or part of the consideration payable by holders
in connection with the purchase of the underlying security or other property pursuant to the Purchase Contracts. The securities related
to Purchase Contracts may be pledged to a collateral agent for our benefit pursuant to a pledge agreement to secure the obligations of
holders of the Purchase Contracts to purchase the underlying security or property under the related Purchase Contracts. The rights of
holders of Purchase Contracts to the related pledged securities will be subject to our security interest therein created by the pledge
agreement. No holder of Purchase Contracts will be permitted to withdraw the pledged securities related to such Purchase Contracts from
the pledge arrangement.
Subject to any restrictions under to our articles,
notice of articles, or the BCBCA, the Purchase Contracts may obligate us to purchase from holders, and obligate holders to sell to us,
a specific or variable number of our common shares, Warrants, Rights, Debt Securities, or any combination thereof.
The prospectus supplement relating to any particular
issuance of Purchase Contracts will describe the terms of the Purchase Contracts. The description in the prospectus supplement will not
necessarily be complete, and reference will be made to the Purchase Contracts, and, if applicable, collateral or depositary arrangements,
relating to the Purchase Contracts, which will be filed with the Commission each time we issue purchase contracts. U.S. federal income
tax considerations applicable to the Purchase Contracts will also be discussed in the prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
We may issue, separately or together with, or
upon conversion, exercise or exchange of other securities, Debt Securities from time to time in one or more series, as set forth in the
applicable prospectus supplement. We may issue senior Debt Securities or subordinated Debt Securities under separate indentures between
us and an indenture trustee to be named in a prospectus supplement, which may be supplemented or amended from time to time following
their execution. The senior Debt Securities will be our direct, unsecured general obligations, will constitute senior indebtedness, and
will have the same rank as our other senior indebtedness. The subordinated Debt Securities will be our direct, unsecured general obligations.
The subordinated Debt Securities will be subordinate and junior in right of payment to all senior indebtedness and, in certain circumstances
relating to our dissolution, winding-up, liquidation, or reorganization, to all other financial obligations. Unless otherwise specified
in the applicable prospectus supplement, the amount of debt, including senior indebtedness, or other financial obligations we may incur
will not be limited.
Senior Debt Securities would be issued under
a senior indenture and subordinated Debt Securities would be issued under a subordinated indenture. The senior indenture and subordinated
indenture are referred to individually in this prospectus as the “indenture”, and collectively as the “indentures.”
We will file the indentures as an exhibit to a Form 6-K or as an amendment to the registration statement of which this prospectus is
a part and which are incorporated by reference into this prospectus.
The particular terms of a series of Debt Securities
will be described in a prospectus supplement relating to such series of Debt Securities. The indentures will be subject to and governed
by the Trust Indenture Act of 1939, as amended. Unless otherwise stated in the applicable prospectus supplement, we will not be limited
in the amount of Debt Securities that we may issue, and neither the senior Debt Securities nor the subordinated Debt Securities will be
secured by any of our property or assets. Thus, by owning Debt Securities, you will be one of our unsecured creditors.
The following is a description of the material
features, terms and provisions of Debt Securities that we may offer. The following summary does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the indentures. The indentures, and any supplemental indentures, will contain the
full legal text of the matters described in this section of the prospectus and their terms may vary from the description set forth herein.
Because this section is a summary, it does not describe every aspect of the Debt Securities or any applicable indentures or supplemental
indenture. Your rights will be defined by the terms of any applicable indenture or supplemental indenture, not the summary provided
herein. This summary is also subject to and qualified by reference to the description of the particular terms of a particular series of
Debt Securities described in the applicable prospectus supplement or supplements. You should carefully consider the actual provisions
of the indentures and any supplemental indentures.
The Debt Securities may be denominated and payable
in U.S. dollars. We may also issue Debt Securities, from time to time, with the principal amount, interest or other amounts payable on
any relevant payment date to be determined by reference to one or more currency exchange rates, securities or baskets of securities,
commodity prices, indices or any other financial, economic or other measure or instrument, including the occurrence or non-occurrence
of any event or circumstance. In addition, we may issue Debt Securities as part of any Units issued by us. All references in this prospectus
or any prospectus supplement to other amounts will include premiums, if any, other cash amounts payable under the applicable indenture,
and the delivery of securities or baskets of securities under the terms of the Debt Securities. Debt securities may bear interest at
a fixed rate, which may be zero, or a floating interest rate.
We are not obligated to issue all Debt Securities
of one series at the same time and, unless otherwise provided in the applicable prospectus supplement, we may reopen a series, without
the consent of the holders of the outstanding Debt Securities of that series, for the issuance of additional Debt Securities of that
series. Additional Debt Securities of a particular series will have the same terms and conditions as outstanding Debt Securities of such
series, except for the issue date and, in some cases, the public offering price and the first interest payment date, and will be consolidated
with, and form a single series with, such outstanding Debt Securities; provided, however, that if such additional Debt Securities are
not fungible with the outstanding Debt Securities of such series for U.S. federal income tax purposes, the additional Debt Securities
will have a separate CUSIP number.
If we denominate the purchase price of any of
the Debt Securities in a foreign currency or currencies, or if the principal of and any premium and interest on any series of Debt Securities
is payable in a foreign currency or currencies, we will provide you with information on the restrictions, elections, general tax considerations,
specific terms and other information with respect to that issue of Debt Securities and such foreign currency or currencies in the applicable
prospectus supplement.
The prospectus supplement will set forth, among
other things:
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the title of Debt Securities; |
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the price or prices (expressed as a percentage of the principal amount) at which
we will sell the Debt Securities; |
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whether the Debt Securities will be senior Debt Securities or subordinated Debt
Securities, and if they are subordinated Debt Securities, the terms of the subordination; |
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any limit on the aggregate principal amount of the Debt Securities and the right,
if any, to extend such date or dates; |
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the date or dates on which we will pay the principal on the Debt Securities; |
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the rate or rates (which may be fixed or variable) per annum or the method used
to determine the rate or rates (including any commodity, commodity index, stock exchange index or financial index) at which the Debt
Securities will bear interest, the date or dates from which interest will accrue, the date or dates on which interest will commence
and be payable and any regular record date for the interest payable on any interest payment date; |
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the right, if any, to extend the interest periods and the duration of that extension; |
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the place or places where principal of, and premium and interest on, the Debt
Securities will be payable; |
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the terms and conditions upon which we may redeem the Debt Securities; |
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any obligation we have to redeem or purchase the Debt Securities pursuant to
any sinking fund or analogous provisions or at the option of a holder of Debt Securities; |
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the dates on which and the price or prices at which we will repurchase Debt
Securities at the option of the holders of Debt Securities and other detailed terms and provisions of these repurchase obligations; |
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the denominations in which the Debt Securities will be issued, if other than
minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof; |
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whether the Debt Securities will be issued in the form of certificated Debt
Securities or global Debt Securities; |
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the portion of principal amount of the Debt Securities payable upon declaration
of acceleration of the maturity date, if other than the principal amount; |
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● |
the designation of the currency or currencies in which payment of principal
of, and premium and interest on, the Debt Securities will be made if other than U.S. dollars; |
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any provisions relating to any security provided for the Debt Securities; |
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● |
any addition to or change in the events of default described in this prospectus
or in the indenture with respect to the Debt Securities and any change in the acceleration provisions described in this prospectus
or in the indenture with respect to the Debt Securities; |
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● |
any addition to or change in the covenants described in this prospectus or in
the indenture with respect to the Debt Securities; |
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● |
any other terms of the Debt Securities, which may modify or delete any provision
of the indenture as it applies to that series; |
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● |
if and as applicable, the terms and conditions of any right to exchange for
or convert Debt Securities of the series into shares of our common shares or other securities or another person; and |
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any depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents with respect to the Debt Securities. |
The foregoing is not intended to be an exclusive
list of the terms that may be applicable to any offered Debt Securities.
We may issue Debt Securities that provide for
an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to
the terms of the indenture. We will provide you with information on the federal income tax considerations and other special considerations
applicable to any of these Debt Securities in the applicable prospectus supplement. The issuance of Debt Securities is subject to our
articles and notice of articles, the BCBCA, and the prior approval of the board of directors and, if applicable, shareholders at a general
meeting.
Exchange and Transfer
Debt Securities may be transferred or exchanged
at the office of the registrar or co-registrar designated by us.
We will not impose a service charge for any transfer
or exchange, but we may require holders to pay any tax or other governmental charges associated with any transfer or exchange.
In the event of any potential redemption of Debt
Securities of any series, we will not be required to:
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● |
issue, register the transfer of, or exchange, any Debt Security of that series
during a period beginning at the opening of 15 business days before the day of sending of a notice of redemption and ending at the
close of business on the day such notice is sent; or |
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● |
register the transfer of or, exchange any, Debt Security of that series selected,
called or being called for redemption, in whole or in part, except the unredeemed portion being redeemed in part. |
We may initially appoint the trustee as the registrar.
Any transfer agent, in addition to the registrar initially designated by us, will be named in the prospectus supplement. We may designate
additional transfer agents or change transfer agents or change the office of the transfer agent. However, we will be required to maintain
a transfer agent in each place of payment for the Debt Securities of each series.
Global Securities
The Debt Securities of any series may be represented,
in whole or in part, by one or more global securities. Each global security will:
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● |
be registered in the name of a depositary that we will identify in a prospectus
supplement; |
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be deposited with the depositary or its nominee; and |
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bear any required legends. |
No global security may be exchanged in whole
or in part for Debt Securities registered in the name of any person other than the depositary or any nominee unless:
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● |
the depositary has notified us that it is unwilling or unable to continue as depositary or has ceased
to be qualified to act as depositary, and in either case we fail to appoint a successor depositary registered as a clearing agency
under the Exchange Act within 90 days of such event; |
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we execute and deliver to the trustee an officer’s certificate to the effect that such global
securities shall be so exchangeable; or |
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an event of default with respect to the Debt Securities represented by such global securities shall
have occurred and be continuing. |
As long as the depositary, or its nominee, is
the registered owner of a global security, the depositary or nominee will be considered the sole owner and holder of the Debt Securities
represented by the global security for all purposes under the indenture. Except in the above limited circumstances, owners of beneficial
interests in a global security:
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● |
will not be entitled to have the Debt Securities registered in their names; |
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will not be entitled to physical delivery of certificated Debt Securities; and |
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will not be considered to be holders of those Debt Securities under the indenture. |
Payments on a global security will be made to
the depositary or its nominee as the holder of the global security. Some jurisdictions have laws that require that certain purchasers
of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial
interests in a global security.
Institutions that have accounts with the depositary
or its nominee are referred to as “participants.” Ownership of beneficial interests in a global security will be limited
to participants and to persons that may hold beneficial interests through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of Debt Securities represented by the global security to the accounts
of its participants. Each person owning a beneficial interest in a global security must rely on the procedures of the depositary (and,
if such person is not a participant, on procedures of the participant through which such person owns its interest) to exercise any rights
of a holder under the indenture.
Ownership of beneficial interests in a global
security will be shown on and effected through records maintained by the depositary, with respect to participants’ interests, or
by any participant, with respect to interests of persons held by participants on their behalf. Payments, transfers and exchanges relating
to beneficial interests in a global security will be subject to policies and procedures of the depositary. The depositary policies and
procedures may change from time to time. Neither we nor the trustee will have any responsibility or liability for the depositary’s
or any participant’s records with respect to beneficial interests in a global security.
Payment and Paying Agent
The provisions of this subsection will apply
to the Debt Securities unless otherwise indicated in the prospectus supplement. Payment of interest on a Debt Security on any interest
payment date will be made to the person in whose name the Debt Security is registered at the close of business on the regular record
date. Payment on Debt Securities of a particular series will be payable at the office of a paying agent or paying agents designated by
us. However, at our option, we may pay interest by mailing a check to the record holder.
We may also name any other paying agents in the
prospectus supplement. We may designate additional paying agents, change paying agents or change the office of any paying agent. However,
we will be required to maintain a paying agent in each place of payment for the Debt Securities of a particular series.
All moneys paid by us to a paying agent for payment
on any Debt Security that remain unclaimed at the end of two years after such payment was due will be repaid to us. Thereafter, the holder
may look only to us for such payment.
Consolidation, Merger and Paying Agent
Except as otherwise set forth in the applicable
prospectus supplement, we may not consolidate with or merge into any other person, in a transaction in which we are not the surviving
corporation, or convey, transfer or lease our properties and assets substantially as an entirety to, any person, unless:
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the successor assumes our obligations on the Debt Securities and under the indenture
pursuant to a supplemental indenture or other agreements in form reasonably satisfactory to the trustee; |
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immediately after giving effect to the transaction and treating our obligations
in connection with or as a result of such transaction as having been incurred as of the time of such transaction, no default or event
of default shall have occurred and be continuing under the indenture; and |
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certain other conditions are met. |
Event of Default
Event of default means, with respect to any series
of Debt Securities, any of the following:
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● |
default in the payment of any interest on any Debt Security of that series when
it becomes due and payable, and continuance of that default for a period of 90 days; |
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default in the payment of principal of, or premium on, any Debt Security of
that series when due and payable; |
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default in the performance or breach of any other covenant or warranty by us
in the indenture (other than a covenant or warranty that has been included in the indenture solely for the benefit of a series of
Debt Securities other than that series), which default continues uncured for a period of 90 days after we receive written notice
from the trustee or we and the trustee receive written notice from the holders of not less than a majority in aggregate principal
amount of the outstanding Debt Securities of that series as provided in the indenture; |
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certain events of bankruptcy, insolvency or reorganization of our Company; and |
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any other event of default provided with respect to Debt Securities of that
series that is described in the applicable prospectus supplement. |
No event of default with respect to a particular
series of Debt Securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an event
of default with respect to any other series of Debt Securities. The occurrence of an event of default may constitute an event of default
under our bank credit agreements in existence from time to time. In addition, the occurrence of certain events of default or an acceleration
under the indenture may constitute an event of default under certain of our other indebtedness outstanding from time to time.
If an event of default (other than an event of
default resulting from certain events of bankruptcy, insolvency or reorganization) with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then the trustee or the holders of not less than 25% in aggregate principal amount of the
outstanding Debt Securities of that series may, by a notice in writing to us (and to the trustee if given by the holders), declare to
be due and payable immediately the principal (or, if the Debt Securities of that series are discount securities, that portion of the
principal amount as may be specified in the terms of that series) of, and accrued and unpaid interest, if any, on all Debt Securities
of that series. In the case of an event of default resulting from certain events of bankruptcy, insolvency or reorganization, the principal
(or such specified amount) of and accrued and unpaid interest, if any, on all outstanding Debt Securities will become and be immediately
due and payable without any declaration or other act on the part of the trustee or any holder of outstanding Debt Securities. At any
time after a declaration of acceleration with respect to Debt Securities of any series has been made, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of that series may rescind and annul the acceleration if all events of default, other
than the non-payment of accelerated principal and interest, if any, with respect to Debt Securities of that series, have been cured or
waived and all sums paid or advanced by the trustee and the reasonable compensation expenses and disbursements of the trustee and its
agents and counsel have been paid as provided in the indenture.
The indenture may provide that the trustee will
be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of outstanding Debt Securities,
unless the trustee receives indemnity satisfactory to it against any loss, liability or expense. Subject to certain rights of the trustee,
the holders of a majority in principal amount of the outstanding Debt Securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the
trustee with respect to the Debt Securities of that series.
No holder of any Debt Security of any series
will have any right to institute any proceeding, judicial or otherwise, with respect to the indenture or for the appointment of a receiver
or trustee, or for any remedy under the indenture, unless:
|
● |
that holder has previously given to the trustee written notice of a continuing
event of default with respect to Debt Securities of that series; and |
|
● |
the holders of at least 25% in aggregate principal amount of the outstanding
Debt Securities of that series have made written request, and offered indemnity satisfactory to the trustee, to the trustee to institute
the proceeding as trustee, and the trustee has not received from the holders of a majority in aggregate principal amount of the outstanding
Debt Securities of that series a direction inconsistent with that request and has failed to institute the proceeding within 60 days. |
Notwithstanding the foregoing, the holder of
any Debt Security will have an absolute and unconditional right to receive payment of the principal of, and premium and any interest
on, that Debt Security on or after the due dates expressed in that Debt Security and to institute suit for the enforcement of such payment.
The indenture may require us, within 120 days
after the end of our fiscal year, to furnish to the trustee a statement as to compliance with the indenture. The indenture may provide
that the trustee may withhold notice to the holders of Debt Securities of any series of any default or event of default (except in payment
on any Debt Securities of that series) with respect to Debt Securities of that series if it in good faith determines that withholding
notice is in the interest of the holders of those Debt Securities.
Modification and Waiver
We may amend or modify the indenture without
the consent of any holder of Debt Securities of the series affected by the modifications or amendments in order to:
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cure any ambiguity, defect or inconsistency, provided that the interests of the holders are not adversely
affected; |
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conform the text of the indenture or the Debt Securities to any corresponding provision of this “Description
of Debt Securities”, as evidenced by an officer’s certificate; |
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provide for the issuance of additional Debt Securities; |
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provide for the assumption of our obligations in the case of a merger or consolidation and our discharge
upon such assumption; |
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add covenants or make any change that would provide any additional rights or benefits to the holders
of the Debt Securities; |
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add guarantees with respect to the Debt Securities; |
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provide for uncertificated Debt Securities in addition to or in place of certificated Debt Securities; |
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secure the Debt Securities; |
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add or appoint a successor or separate trustee; |
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make any change that does not adversely affect the interests of any holder of Debt Securities; or |
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obtain or maintain the qualification of the indenture under the Trust Indenture Act of 1939, as amended. |
Other amendments and modifications of the indenture
or the Debt Securities issued may be made with the consent of the holders of at least a majority of the aggregate principal amount of
the outstanding Debt Securities of the affected series, and our compliance with any provision of the indenture with respect to the Debt
Securities may be waived by written notice to the trustee by the holders of a majority of the aggregate principal amount of the outstanding
Debt Securities of the affected series. However, no modification or amendment may, without the consent of the holder of each outstanding
Debt Security of the affected series:
|
● |
reduce the principal amount, any premium or change the fixed maturity of any
Debt Security or alter or waive any of the provisions with respect to the redemption or repurchase of the Debt Securities; |
|
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change the place of payment or currency in which principal, any premium or interest
is paid; |
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impair the right to institute suit for the enforcement of any payment on the
Debt Securities; |
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waive a payment default with respect to the Debt Securities; |
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reduce the interest rate or extend the time for payment of interest on the Debt
Securities; |
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make any change to the amendment and modification provisions in the indenture;
or |
|
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reduce the percentage in principal amount outstanding of Debt Securities, the
consent of the holders of which is required for any of the foregoing modifications or otherwise necessary to modify, supplement or
amend the indenture or to waive any past default. |
Except for certain specified provisions, the
holders of at least a majority in principal amount of the outstanding Debt Securities of an affected series may, on behalf of the holders
of all Debt Securities of such series, waive our compliance with provisions of the indenture. The holders of a majority in aggregate
principal amount of the outstanding Debt Securities of such series may, on behalf of the holders of all the Debt Securities of such series,
waive any past default under the indenture with respect to such Debt Securities and its consequences, except a default in the payment
of the principal of, or premium or any interest on, any Debt Security or in respect of a covenant or provision that cannot be modified
or amended without the consent of all of the holders of the outstanding Debt Securities of the affected series; provided, however, that
the holders of a majority in aggregate principal amount of the outstanding Debt Securities of such series may rescind and annul an acceleration
and its consequences, including any related payment default that resulted from the acceleration.
Defeasance of Debt Securities and Certain
Covenants in Certain Circumstances
Legal Defeasance. The indenture may provide
that, in certain circumstances, we may be discharged from any and all obligations in respect of the Debt Securities of any series (except
for certain obligations to register the transfer or exchange of Debt Securities, to replace stolen, lost or mutilated Debt Securities,
and to maintain paying agencies and certain provisions relating to the treatment of funds held by paying agents). We will be so discharged
upon the deposit with the trustee, in trust, of money and/or U.S. government obligations that, through the payment of interest and principal
in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent
public accountants to pay and discharge each installment of principal, premium and interest in accordance with the terms of the indenture
and the Debt Securities of that series.
This discharge may occur only if, among other
things, we have delivered to the trustee an opinion of counsel stating that we have received from, or there has been published by, the
U.S. Internal Revenue Service a ruling or, since the date of execution of the indenture, there has been a change in the applicable U.S.
federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the beneficial owners of
the Debt Securities of the applicable series will not recognize income, gain or loss for U.S. federal income tax purposes as a result
of the deposit, defeasance and discharge and will be subject to U.S. federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if the deposit, defeasance and discharge had not occurred.
Defeasance of Certain Covenants. The indenture
may provide that, upon compliance with certain conditions, we may omit to comply with certain covenants set forth in the indenture, and
any omission to comply with those covenants will not constitute a default or an event of default with respect to the Debt Securities
of the applicable series, or covenant defeasance.
The conditions include:
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depositing with the trustee money and/or U.S. government obligations that, through
the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of
a nationally recognized firm of independent public accountants to pay and discharge each installment of principal of, premium and
interest in accordance with the terms of the indenture and the Debt Securities of the applicable series; and |
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delivering to the trustee an opinion of counsel to the effect that the beneficial
owners of the Debt Securities of the applicable series will not recognize income, gain or loss for U.S. federal income tax purposes
as a result of the deposit and related covenant defeasance and will be subject to U.S. federal income tax on the same amounts and
in the same manner and at the same times as would have been the case if the deposit and related covenant defeasance had not occurred. |
Conversion and Exchange Rights
If specified in the applicable prospectus supplement,
the Debt Securities of a series may be convertible into or exchangeable for common shares or other securities of us or another entity.
We will describe in the applicable prospectus supplement, among other things, any required shareholder approvals for the conversion and
issuance of shares, the conversion or exchange rate or price and any adjustments thereto, the conversion or exchange period or periods,
provisions as to whether conversion or exchange will be mandatory, at our option or at the option of the holders of that series of Debt
Securities, and provisions affecting conversion or exchange in the event of the redemption of that series of Debt Securities.
Governing Law
The indenture and the Debt Securities, and any
claim, controversy or dispute arising under or related to the indenture or the Debt Securities, will be governed by and construed in
accordance with the laws of the state of New York.
DESCRIPTION
OF UNITS
We may issue Units comprising one or more securities
described in this prospectus in any combination. The following description sets forth certain general terms and provisions of the Units
that we may offer pursuant to this prospectus. The particular terms of the Units and the extent, if any, to which the general terms and
provisions may apply to the Units so offered will be described in the applicable prospectus supplement. The issuance of Units is subject
to our articles and notice of articles, the BCBCA, and the prior approval of the board of directors and shareholders at a general meeting.
We will incorporate by reference from reports
that we file with the Commission, the form of unit agreement that describes the terms of the series of Units we are offering, and any
supplemental agreements, before the issuance of the related series of Units. The following summaries of material terms and provisions
of the Units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any supplemental
agreements applicable to a particular series of Units. We urge you to read the applicable prospectus supplements related to the particular
series of Units that we may offer under this prospectus, as well as any related free writing prospectuses and the complete unit agreement
and any supplemental agreements that contain the terms of the Units.
Each Unit will be issued so that the holder of
the Unit is also the holder of each security included in the Unit. Thus, the Unit will have the rights and obligations of a holder of
each included security. Units will be issued pursuant to the terms of a unit agreement, which may provide that the securities included
in the Unit may not be held or transferred separately at any time or at any time before a specified date. A copy of the forms of the
unit agreement and the unit certificate relating to any particular issue of Units will be filed with the Commission each time we issue
Units, and you should read those documents for provisions that may be important to you.
The prospectus supplement relating to any particular
issuance of Units will describe the terms of those Units, including, to the extent applicable, the following:
| ● | the designation
and terms of the Units and the securities comprising the Units, including whether and under
what circumstances those securities may be held or transferred separately; |
| ● | any provision
for the issuance, payment, settlement, transfer or exchange of the Units or of the securities
comprising the Units; |
| ● | any provision
of the governing unit agreement that different from those described below; and |
| ● | whether the Units
will be issued in fully registered or global form. |
The provisions described in this section, as
well as those set forth in any prospectus supplement or as described under “Description of common shares”, “Description
of Warrants”, “Description of Rights”, “Description of Purchase Contracts” and “Description of Debt
Securities” will apply to each Unit, as applicable, and to any common share, Warrant, Right, Purchase Contract or Debt Security,
included in each Unit, as applicable.
COMPARISON OF BRITISH COLUMBIA
AND DELAWARE CORPORATE LAW
The Company is a corporation governed by the
BCBCA. The BCBCA differs in some material respects from the laws generally applicable to Delaware corporations under the Delaware General
Corporation Law (the “DGCL”). Below is a summary of certain of those material differences. This summary is qualified in its
entirety by reference to the DGCL, the BCBCA, and the Company’s articles and notice of articles.
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Delaware |
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British
Columbia (Canada) |
Stockholder/ Shareholder Approval of Business Combinations;
Fundamental Changes |
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Under
the DGCL, certain fundamental changes, such as amendments to the certificate of incorporation,
a merger, consolidation, sale, lease, exchange or other disposition of all or substantially
all of the property of a corporation not in the usual and regular course of the corporation’s
business, or a dissolution of the corporation, are generally required to be approved by the
affirmative vote of the holders of a majority of the outstanding stock present in person
or represented by proxy and entitled to vote on the matter, unless a corporation’s certificate
of incorporation or the bylaws require a higher percentage.
However, generally under the DGCL, stockholder
approval is not required if the number of shares of common stock, including securities convertible into common stock, of a corporation
issued in a merger does not exceed 20% of its stock outstanding immediately prior to the effective date of the merger. In certain
situations, the approval of a business combination may require approval by a certain number of the holders of a class or series of
shares. In addition, Section 251(h) of the DGCL provides that stockholders of a constituent corporation need not vote to approve
a merger if: (i) the merger agreement permits or requires the merger to be effected under Section 251(h) and provides that the merger
shall be effected as soon as practicable following the tender offer or exchange offer, (ii) a corporation consummates a tender or
exchange offer for any and all of the outstanding stock of such constituent corporation that would otherwise be entitled to vote
to approve the merger, (iii) immediately following the consummation of the offer, the stock accepted for purchase or exchanges plus
the stock owned by the consummating corporation equals at least the percentage of stock that would be required to adopt the agreement
of merger under the DGCL, (iv) the corporation consummating the offer merges with or into such constituent corporation and (v) each
outstanding share of each class or series of stock of the constituent corporation that was the subject of and not irrevocably accepted
for purchase or exchange in the offer is to be converted in the merger into, or the right to receive, the same consideration to be
paid for the shares of such class or series of stock of the constituent corporation irrevocably purchased or exchanged in such offer.
The DGCL does not contain a procedure comparable
to a plan of arrangement under BCBCA. |
|
Under
the BCBCA and the Company’s articles, certain company alterations, such as changes to authorized
share structure, continuances, into or out of province, certain amalgamations, sales, leases
or other dispositions of all or substantially all of the undertaking of a company (other
than in the ordinary course of business) liquidations, dissolutions, and certain arrangements
are required to be approved by ordinary or special resolution as applicable.
An ordinary resolution is a resolution passed
at a shareholders’ meeting by a simple majority of the votes cast by shareholders, in person or by proxy, that carry the right
to vote on the resolution.
A special resolution is a resolution passed
at a shareholders’ meeting by a two-thirds majority of the votes cast by shareholders, in person or by proxy, that carry the
right to vote on the resolution.
Holders of multiple voting shares and subordinate
voting shares vote together at all meetings of shareholders except meetings at which only holders of a particular class are entitled
to vote.
Under the BCBCA, an action that prejudices
or interferes with a right or special right attached to issued shares of a class or series of shares must be approved by a special
separate resolution of the holders of the class or series of shares being affected. Under the BCBCA, arrangements are permitted and
a company may make any proposal it considers appropriate “despite any other provision” of the BCBCA. In general, a plan
of arrangement is approved by a company’s board of directors and then is submitted to a court for approval. It is customary for a
company in such circumstances to apply to a court initially for an interim order governing various procedural matters prior to calling
any security holder meeting to consider the proposed arrangement. Plans of arrangement involving shareholders must be approved by
a special resolution of shareholders, including holders of shares not normally entitled to vote.
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Delaware |
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British Columbia (Canada) |
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The court
may, in respect of an arrangement proposed with persons other than shareholders and creditors, require
that those persons approve the arrangement in the manner and to the extent required by the court.
The court determines, among other things, to whom notice shall be given and whether, and in what manner,
approval of any person is to be obtained and also determines whether any shareholders may dissent
from the proposed arrangement and receive payment of the fair value of their shares. Following compliance
with the procedural steps contemplated in any such interim order (including as to obtaining security
holder approval), the court would conduct a final hearing, which would, among other things, assess
the fairness of the arrangement and approve or reject the proposed arrangement.
The BCBCA does not contain a provision comparable
to Section 251(h) of the DGCL. |
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Special Vote Required for Combinations with Interested Stockholders/ Shareholders |
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Unless a Delaware corporation’s certificate of incorporation provides that it elects not to be governed
by Section 203 of the DGCL, a Delaware corporation may not engage in a business combination with an interested stockholder for a
period of three years after the time of the transaction in which the person became an interested stockholder, unless (i) the board
of directors of the corporation, prior to the time of the transaction in which the person became an interested stockholder, approves
either the business combination or the transaction in which the stockholder becomes an interested stockholder; (ii) upon consummation
of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares owned by directors
and officers of the corporation and shares held in certain types of employee stock plans); or (iii) the board of directors and the
holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder approve the business combination
on or after the time of the transaction in which the person became an interested stockholder. For purposes of Section 203, the DGCL,
subject to specified exceptions, generally defines an interested stockholder to include any person who, together with that person’s
affiliates or associates, (i) owns 15% or more of the outstanding voting stock of the corporation (including any rights to acquire
stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights,
and stock with respect to which the person has voting rights only), or (ii) is an affiliate or associate of the corporation and owned
15% or more of the outstanding voting stock of the corporation at any time within the previous three years. |
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The BCBCA
does not contain a provision comparable to Section 203 of the DGCL with respect to business combinations. |
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Delaware |
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British Columbia (Canada) |
Appraisal Rights; Rights to Dissent |
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Under the DGCL, a stockholder of a corporation participating in some types of major corporate transactions
may, under varying circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount
of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction.
For example, a stockholder is entitled to appraisal rights in the case of a merger or consolidation if the shareholder is required
to accept in exchange for the shares anything other than: (i) shares of stock of the corporation surviving or resulting from the
merger or consolidation, or depository receipts in respect thereof; (ii) shares of any other corporation, or depository receipts
in respect thereof, that on the effective date of the merger or consolidation will be either listed on a national securities exchange
or held of record by more than 2,000 shareholders; (iii) cash instead of fractional shares of the corporation or fractional depository
receipts of the corporation; or (iv) any combination of the foregoing |
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The BCBCA provides that shareholders of a company are entitled to exercise dissent rights in respect
of certain matters and to be paid the fair value of their shares in connection therewith. The dissent right is applicable where the
company resolves to (i) alter its articles to alter the restrictions on the powers of the company or on the business it is permitted
to carry on; (ii) approve certain amalgamations; (iii) approve an arrangement, where the terms of the arrangement or court orders
relating thereto permit dissent; (iv) sell, lease or otherwise dispose of all or substantially all of its undertaking; or (v) continue
the company into another jurisdiction. Dissent may also be permitted if authorized by resolution. A court may also make an order
permitting a shareholder to dissent in certain circumstances. |
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Compulsory Acquisition |
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Under the DGCL, a merger in which one corporation owns, prior to the merger, 90% or more of each
class of stock of a second corporation may be completed without the vote of the second corporation’s board of directors or shareholders. |
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The BCBCA provides that if, within four months after the making of an offer to acquire shares, or
any class of shares, of a company, the offer is accepted by the holders of not less than 90% of the shares (other than the shares
held by the offeror or an affiliate of the offeror) of any class of shares to which the offer relates, the offeror is entitled, upon
giving proper notice within five months after the date of the offer, to acquire (on the same terms on which the offeror acquired
shares from those holders of shares who accepted the offer) the shares held by those holders of shares of that class who did not
accept the offer. Offerees may apply to the court, within two months of receiving notice, and the court may set a different price
or terms of payment and may make any consequential orders or directions as it considers appropriate. |
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Stockholder/ Shareholder Consent to Action Without Meeting |
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Under the DGCL, unless otherwise provided in a corporation’s certificate of incorporation, any action
that can be taken at a meeting of the stockholders may be taken without a meeting if written consent to the action is signed by the
holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take the action at a meeting
of the stockholders. |
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Although it is not customary for public companies to do so, under the BCBCA, shareholder action without
a meeting may be taken by a consent resolution of shareholders provided that it satisfies the thresholds for approval in a company’s
articles, the BCBCA and the regulations thereunder. A consent resolution is as valid and effective as if it was a resolution passed
at a meeting of shareholders. |
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Delaware |
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British Columbia (Canada) |
Special Meetings of Stockholders/ Shareholders |
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Under the DGCL, a special meeting of shareholders may be called by the board of directors or by such
persons authorized in the certificate of incorporation or the bylaw |
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Under the BCBCA, the holders of not less than 5% of the issued shares of a company that carry the
right to vote at a general meeting may requisition that the directors call a meeting of shareholders for the purpose of transacting
any business that may be transacted at a general meeting. Upon receiving a requisition that complies with the technical requirements
set out in the BCBCA, the directors must, subject to certain limited exceptions, call a meeting of shareholders to be held not more
than four months after receiving the requisition. If the directors do not call such a meeting within 21 days after receiving the
requisition, the requisitioning shareholders or any of them holding in aggregate not less than 2.5% of the issued shares of the company
that carry the right to vote at general meetings may call the meeting. |
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Distributions and Dividends; Repurchases and Redemptions |
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Under the DGCL, subject to any restrictions
contained in the certificate of incorporation, a corporation may pay dividends out of its capital surplus or, if there is no
surplus, out of net profits for the fiscal year in which the dividend is declared or the preceding fiscal year, as long as the
amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount
of the capital represented by issued and outstanding shares having a preference upon the distribution of assets. Surplus is defined
in the DGCL as the excess of the net assets over capital, as such capital may be adjusted by the board.
A Delaware corporation may purchase or redeem
shares of any class for cash or other property except when its capital is impaired or would be impaired by the purchase or redemption.
A corporation may, however, purchase or redeem out of capital shares that are entitled, upon any distribution of its assets, to a
preference over another class or series of its shares or, if no shares entitled to a preference are outstanding, any of its shares
if such shares will be retired and the capital reduced. |
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Under the BCBCA, unless its charter or
an enactment provides otherwise, a company may pay a dividend in money or other property (including by issuing shares or warrants
by way of dividend) unless there are reasonable grounds for believing that the company is insolvent, or the payment of the dividend
would render the company insolvent. The BCBCA provides that no special rights or restrictions attached to a series of any class
of shares confer on the series a priority in respect of dividends or return of capital over any other series of shares of the
same class.
Under the BCBCA, the purchase or other acquisition
by a company of its shares is generally subject to solvency tests similar to those applicable to the payment of dividends (as set
out above). The Company is permitted, under its articles, to acquire any of its shares, subject to the special rights and restrictions
attached to such class or series of shares and the approval of its board of directors.
Under the BCBCA, subject to solvency tests
similar to those applicable to the payment of dividends (as set out above), a company may redeem, on the terms and in the manner
provided in its articles, any of its shares that has a right of redemption attached to it. |
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Delaware |
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British Columbia (Canada) |
Vacancies on Board of Directors |
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Under the DGCL, a vacancy or a newly created directorship may be filled by a majority of the directors
then in office, although less than a quorum, or by the sole remaining director, unless otherwise provided in the certificate of incorporation
or bylaws. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders
at which the term of the class of directors to which the newly elected director has been elected expires. |
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Under the BCBCA and the Company’s articles,
a vacancy among the directors created by the removal of a director may be filled by the shareholders at the meeting at which
the director is removed or, if not filled by the shareholders at such meeting, by the shareholders or by the remaining directors.
In the case of a casual vacancy, the remaining directors may fill the vacancy. Under the BCBCA, directors may increase the size
of the board of directors by one third of the number of current directors.
Under the BCBCA and the Company’s articles,
if as a result of one or more vacancies, the number of directors in office falls below the number required for a quorum, the remaining
directors may appoint as directors the number of individuals that, when added to the number of remaining directors, will constitute
a quorum and/or call a shareholders’ meeting to fill any or all vacancies among directors and to conduct such other business that
may be dealt with at that meeting, but must not take any other action until a quorum is obtained. |
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Removal of Directors; Terms of Directors |
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Under the DGCL, except in the case of a corporation with a classified board or with cumulative voting,
any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares entitled to vote
at an election of directors. If a Delaware corporation has a classified board, unless its certificate of incorporation provides
otherwise, any director or the entire board may only be removed by stockholders for cause. |
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The Company’s articles allow for the removal of a director by special resolution of the shareholders. |
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Inspection of Books and Records |
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Under the DGCL, any holder of record of stock or a person who is the beneficial owner of shares of
such stock held either in a voting trust or by a nominee on behalf of such person has the right during usual business hours to inspect
the corporation’s books and records for a proper purpose |
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Under the BCBCA, directors and shareholders
may, without charge, inspect certain of the records of a company. Former shareholders and directors may also inspect certain
of the records, free of charge, but only those records pertaining to the times that they were shareholders or directors.
Public companies must allow all persons to
inspect certain records of the company free of charge. |
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Delaware |
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British Columbia (Canada) |
Amendment of Governing Documents |
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Under the DGCL, a certificate of incorporation
may be amended if: (i) the board of directors adopts a resolution setting forth the proposed amendment, declares the advisability
of the amendment and directs that it be submitted to a vote at a meeting of shareholders; provided that, unless required by the
certificate of incorporation, no meeting or vote is required to adopt an amendment for certain specified changes; and (ii) the
holders of a majority of the outstanding shares of stock entitled to vote on the matter approve the amendment, unless the certificate
of incorporation requires the vote of a greater number of shares.
If a class vote on the amendment is required
by the DGCL, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate
of incorporation or by other provisions of the DGCL.
Under the DGCL, the board of directors may
amend a corporation’s bylaws if so authorized in the certificate of incorporation. The shareholders of a Delaware corporation also
have the power to amend bylaws. |
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Under the BCBCA, a company may amend
its articles or notice of articles by (i) the type of resolution specified in the BCBCA, (ii) if the BCBCA does not specify a
type of resolution, then by the type specified in the company’s articles, or (iii) if the company’s articles do not specify a
type of resolution, then by special resolution. The BCBCA permits many substantive changes to a company’s articles (such as a
change in the company’s authorized share structure or a change in the special rights or restrictions that may be attached to
a certain class or series of shares) to be changed by the resolution specified in that company’s articles.
Our articles provide that certain changes
to the Company’s share structure and any creation or alteration of special rights and restrictions attached to a series or class
of shares be done by way of ordinary resolution. However, if a right or special right attached to a class or series of shares would
be prejudiced or interfered with by such an alteration, the BCBCA requires that holders of such class or series of shares must approve
the alteration by a special separate resolution of those shareholders. |
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Delaware |
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British Columbia (Canada) |
Indemnification of Directors and Officers |
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Under the
DGCL, subject to specified limitations in the case of derivative suits brought by a corporation’s
stockholders in its name, a corporation may indemnify any person who is made a party to any action,
suit or proceeding on account of being a director, officer, employee or agent of the corporation
(or was serving at the request of the corporation in such capacity for another corporation, partnership,
joint venture, trust or other enterprise) against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him or her in connection
with the action, suit or proceeding, provided that there is a determination that: (i) the individual
acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests
of the corporation; and (ii) in a criminal action or proceeding, the individual had no reasonable
cause to believe his or her conduct was unlawful.
Without court approval, however, no indemnification
may be made in respect of any derivative action in which an individual is adjudged liable to the corporation, except to the extent
the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication
but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity.
The DGCL requires indemnification of directors
and officers for expenses (including attorneys’ fees) actually and reasonably relating to a successful defense on the merits or otherwise
of a derivative or third-party action. Under the DGCL, a corporation may advance expenses to any director or officer relating to
the defense of any proceeding upon the receipt of an undertaking by or on behalf of the director or officer to repay such amount
if it shall ultimately be determined that such person is not entitled to be indemnified. |
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Under the
BCBCA, a company may indemnify: (i) a current or former director or officer of that company; or (ii)
a current or former director or officer of another corporation if, at the time such individual held
such office, the corporation was an affiliate of the company, or if such individual held such office
at the company’s request against all costs, charges and expenses, including an amount paid to settle
an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal,
administrative or other legal proceeding or investigative action (whether current, threatened, pending
or completed) in which he or she is involved because of that person’s position as an indemnifiable
person, unless: (i) the individual did not act honestly and in good faith with a view to the best
interests of such company or the other entity, as the case may be; or (ii) in the case of a proceeding
other than a civil proceeding, the individual did not have reasonable grounds for believing that
the individual’s conduct was lawful. A company cannot indemnify an indemnifiable person if it is
prohibited from doing so under its articles. In addition, a company must not indemnify an indemnifiable
person in proceedings brought against the indemnifiable person by or on behalf of the company or
an associated company. A company may pay, as they are incurred in advance of the final disposition
of an eligible proceeding, the expenses actually and reasonably incurred by an indemnifiable person
in respect of that proceeding only if the indemnifiable person has provided an undertaking that,
if it is ultimately determined that the payment of expenses was prohibited, the indemnifiable person
will repay any amounts advanced. Subject to the aforementioned prohibitions on indemnification, a
company must, after the final disposition of an eligible proceeding, pay the expenses actually and
reasonably incurred by an indemnifiable person in respect of such eligible proceeding if such indemnifiable
person has not been reimbursed for such expenses, and was wholly successful, on the merits or otherwise,
in the outcome of such eligible proceeding or was substantially successful on the merits in the outcome
of such eligible proceeding. On application from an indemnifiable person, a court may make any order
the court considers appropriate in respect of an eligible proceeding, including the indemnification
of penalties imposed or expenses incurred in any such proceedings and the enforcement of an indemnification
agreement.
As permitted by the BCBCA, the Company’s
articles require it to indemnify its directors, officers, former directors or officers (and such individual’s respective heirs and
legal representatives) and permit the Company to indemnify any person to the extent permitted by the BCBCA. |
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Delaware |
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British Columbia (Canada) |
Limited Liability of Directors |
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The DGCL permits the adoption of a provision in a corporation’s certificate of incorporation limiting
or eliminating the monetary liability of a director to a corporation or its shareholders by reason of a director’s breach of the
director’s fiduciary duties, except for (i) any breach the duty of loyalty to the corporation or its shareholders; (ii) any act or
omission not in good faith or involving intentional misconduct or a known violation of law; (iii) any breach in which the director
obtains an improper personal benefit from the corporation; or (iv) the unlawful payment of a dividend or the unlawful approval a
stock repurchase. |
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Under the BCBCA, a director or officer
of a company must (i) act honestly and in good faith with a view to the best interests of the company; (ii) exercise the care,
diligence and skill that a reasonably prudent individual would exercise in comparable circumstances; (iii) act in accordance
with the BCBCA and the regulations thereunder; and (iv) subject to (i) to (iii), act in accordance with the articles of the company.
These statutory duties are in addition to duties under common law and equity.
No provision in a contract or the articles
of a company may relieve a director or officer of a company from the above duties.
Under the BCBCA, a director is not liable
for certain acts if the director has otherwise complied with his or her duties and relied, in good faith, on (i) financial statements
of the company represented to the director by an officer of the company or in a written report of the auditor of the company to fairly
reflect the financial position of the company, (ii) a written report of a lawyer, accountant, engineer, appraiser or other person
whose profession lends credibility to a statement made by that person, (iii) a statement of fact represented to the director by an
officer of the company to be correct, or (iv) any record, information or representation that the court considers provides reasonable
grounds for the actions of the director, whether or not that record was forged, fraudulently made or inaccurate or that information
or representation was fraudulently made or inaccurate. Further, a director is not liable if the director did not know and could not
reasonably have known that the act done by the director or authorized by the resolution voted for or consented to by the director
was contrary to the BCBCA. |
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Delaware |
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British Columbia (Canada) |
Stockholder/ Shareholder Lawsuits |
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Under the DGCL, a stockholder may bring a derivative action on behalf of the corporation to enforce
the rights of the corporation; provided, however, that under Delaware case law, the plaintiff generally must be a stockholder not
only at the time of the transaction that is the subject of the suit, but also throughout the duration of the derivative suit. Delaware
law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the derivative claim
before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile. An individual also may commence
a class action suit on behalf of himself or herself and other similarly situated stockholders where the requirements for maintaining
a class action have been met. |
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Under the BCBCA, a shareholder (including
a beneficial shareholder) or director of a company and any person who, in the discretion of the court, is an appropriate person
to make an application to court to prosecute or defend an action on behalf of a company (a derivative action) may, with judicial
leave: (i) bring an action in the name and on behalf of the company to enforce a right, duty or obligation owed to the company
that could be enforced by the company itself or to obtain damages for any breach of such right, duty or obligation or (ii) defend,
in the name and on behalf of the company, a legal proceeding brought against the company.
Under the BCBCA, the court may grant leave
if: (i) the complainant has made reasonable efforts to cause the directors of the company to prosecute or defend the action; (ii)
notice of the application for leave has been given to the company and any other person that the court may order; (iii) the complainant
is acting in good faith; and (iv) it appears to the court to be in the interests of the company for the action to be prosecuted or
defended.
Under the BCBCA, upon the final disposition
of a derivative action, the court may make any order it determines to be appropriate. In addition, under the BCBCA, a court may order
a company to pay the complainant’s interim costs, including legal fees and disbursements. However, the complainant may be held accountable
for the costs on final disposition of the action. |
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Oppression Remedy |
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Although the DGCL imposes upon directors and officers fiduciary duties of loyalty (i.e., a duty to
act in a manner believed to be in the best interest of the corporation and its stockholders) and care, the DGCL does not provide
for a remedy for a breach of fiduciary duties that is comparable to the BCBCA’s oppression remedy. |
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The BCBCA’s oppression remedy enables
a court to make an order (interim or final) to rectify the matters complained of if the court is satisfied upon application by
a shareholder (as defined below) that the affairs of the company are being conducted or that the powers of the directors have
been exercised in a manner that is oppressive, or that some action of the company or shareholders has been or is threatened to
be taken which is unfairly prejudicial, in each case to one or more shareholders. The applicant must be one of the persons being
oppressed or prejudiced and the application must be brought in a timely manner. A “shareholder” for the purposes of
the oppression remedy includes legal and beneficial owners of shares as well as any other person whom the court considers appropriate.
The oppression remedy provides the court
with extremely broad and flexible jurisdiction to intervene in corporate affairs to protect shareholders. |
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Delaware |
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British Columbia (Canada) |
Advance Notification Requirements for Proposals of Stockholders/Shareholders |
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Delaware corporations typically have
provisions in their bylaws, often referred to as “advance notice bylaws”, that require a stockholder proposing a nominee
for election to the board of directors or other proposals at an annual or special meeting of the stockholders to provide notice
of any such proposals to the corporation in advance of the meeting for any such proposal to be brought before the meeting of
the stockholders. In addition, advance notice bylaws frequently require the stockholder nominating a person for election to the
board of directors to provide information about the nominee, such as his or her age, address, employment and beneficial ownership
of shares of the corporation’s capital stock. The stockholder may also be required to disclose information about the stockholder,
including, among other things, his or her name, share ownership and agreement, arrangement or understanding with respect to such
nomination.
For other proposals, the proposing stockholder
is often required by the bylaws to provide a description of the proposal and any other information relating to such stockholder or
beneficial owner, if any, on whose behalf that proposal is being made, required to be disclosed in a proxy statement or other filings
required to be made in connection with the solicitation of proxies for the proposal and pursuant to and in accordance with the Exchange
Act and the rules and regulations promulgated thereunder. |
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Under the BCBCA, qualified shareholders
holding at least one percent (1%) of the Company’s issued voting shares or whose shares have a fair market value in excess of
$2,000 in the aggregate may make proposals for matters to be considered at the annual general meeting of shareholders. Such proposals
must be sent to the Company in advance of any proposed meeting by delivering a timely written notice in proper form to the Company’s
registered office in accordance with the requirements of the BCBCA. The notice must include information on the business the shareholder
intends to bring before the meeting. To be a qualified shareholder, a shareholder must currently be and have been a registered
or beneficial owner of at least one share of the company for at least two years before the date of signing the proposal.
If the proposal and a written statement in
support of the proposal (if any) are submitted at least three months before the anniversary date of the previous annual meeting and
the proposal and written statement (if any) meet other specified requirements, then the company must either set out the proposal,
including the names and mailing addresses of the submitting person and supporters and the written statement (if any), in the proxy
circular of the company or attach the proposal and written statement thereto.
In certain circumstances, the company may
refuse to process a proposal. |
TAX
The material tax consequences of any offering
of securities will be described in the applicable prospectus supplement.
PLAN OF DISTRIBUTION
The securities being offered by this prospectus
may be sold:
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to or through one or more underwriters on a firm commitment or agency basis; |
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through put or call option transactions relating to the securities; |
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through broker-dealers; |
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directly to purchasers, through a specific bidding or auction process, on a negotiated basis
or otherwise; |
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through any other method permitted pursuant to applicable law; or |
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through a combination of any such methods of sale. |
At any time a particular offer of the securities
covered by this prospectus is made, a revised prospectus or prospectus supplement, if required, will be distributed which will set forth
the aggregate amount of securities covered by this prospectus being offered and the terms of the offering, including the name or names
of any underwriters, dealers, brokers or agents, any discounts, commissions, concessions and other items constituting compensation from
us and any discounts, commissions or concessions allowed or reallowed or paid to dealers. Such prospectus supplement, and, if necessary,
a post-effective amendment to the registration statement of which this prospectus is a part, will be filed with the Commission to reflect
the disclosure of additional information with respect to the distribution of the securities covered by this prospectus. In order to comply
with the securities laws of certain states, if applicable, the securities sold under this prospectus may only be sold through registered
or licensed broker-dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from registration or qualification requirements is available and is complied with.
The distribution of securities may be effected
from time to time in one or more transactions, including block transactions and transactions on the Nasdaq Capital Market or any other
organized market where the securities may be traded. The securities may be sold at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or at negotiated prices. The consideration
may be cash or another form negotiated by the parties. Agents, underwriters or broker-dealers may be paid compensation for offering and
selling the securities. That compensation may be in the form of discounts, concessions or commissions to be received from us or from
the purchasers of the securities or in the form of securities such as common shares or warrants. Any dealers and agents participating
in the distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities
may be deemed to be underwriting discounts. If any such dealers or agents were deemed to be underwriters, they may be subject to statutory
liabilities under the Securities Act.
We may directly solicit offers to purchase the
securities being offered by this prospectus and may also engage in “at-the-market” offerings as defined in Rule 415 of the
Securities Act. We may also designate agents to solicit offers to purchase the securities from time to time. We will name in a prospectus
supplement any underwriter or agent involved in the offer or sale of the securities.
Agents may from time to time solicit offers to
purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or sale of
the securities and set forth any compensation payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent
will be acting on a best efforts basis for the period of its appointment. Any agent selling the securities covered by this prospectus
may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities.
If underwriters are used in a sale, securities
will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery
contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used
in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters, as well as any other underwriter
or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the public offering price, if applicable. The prospectus and prospectus supplement
will be used by the underwriters to resell the securities.
If a dealer is used in the sale of the securities,
we or an underwriter will sell the securities 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. To the extent required, we will set forth in the prospectus supplement
the name of the dealer and the terms of the transactions.
We may directly solicit offers to purchase the
securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters
within the meaning of the Securities Act with respect to any resale of the securities. To the extent required, the prospectus supplement
will describe the terms of any such sales, including the terms of any bidding or auction process, if used.
Agents, underwriters and dealers may be entitled
under agreements which may be entered into with us to indemnification by us against specified liabilities, including liabilities incurred
under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required,
the prospectus supplement will describe the terms and conditions of the indemnification or contribution. Some of the agents, underwriters
or dealers, or their affiliates may be customers of, engage in transactions with or perform services for us or our subsidiaries.
Any person participating in the distribution
of securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the
Exchange Act and the applicable Commission rules and regulations, including, among others, Regulation M, which may limit the timing of
purchases and sales of any of our securities by that person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of our securities to engage in market-making activities with respect to our securities. These restrictions may affect
the marketability of our securities and the ability of any person or entity to engage in market-making activities with respect to our
securities.
Certain persons participating in an offering
may engage in over-allotment, stabilizing transactions, short-covering transactions, penalty bids and other transactions that stabilize,
maintain or otherwise affect the price of the offered securities. These activities may maintain the price of the offered securities at
levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering
transactions or imposing penalty bids, each of which is described below.
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A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the
purpose of pegging, fixing or maintaining the price of a security. |
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A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate
or the effecting of any purchase to reduce a short position created in connection with the offering. |
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A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling
concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member
are purchased in syndicate covering transactions. |
These transactions may be effected on an exchange
or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated quotation system,
or in the over-the-counter market or otherwise.
If so indicated in the applicable prospectus
supplement, we will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase offered
securities from us at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts providing
for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the
prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts.
In addition, common shares may be issued upon
conversion of or in exchange for Debt Securities or other securities.
Any underwriters to whom offered securities are
sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a national securities
exchange. No assurance can be given that there will be a market for the offered securities.
Any securities that qualify for sale pursuant
to Rule 144 or Regulation S under the Securities Act, may be sold under Rule 144 or Regulation S rather than pursuant to this prospectus.
To the extent that we make sales to or through
one or more underwriters or agents in at-the-market offerings, we will do so pursuant to the terms of a distribution agreement between
us and the underwriters or agents. If we engage in at-the-market sales pursuant to a distribution agreement, we will sell our common
shares to or through one or more underwriters or agents, which may act on an agency basis or on a principal basis. During the term of
any such agreement, we may sell common shares on a daily basis in exchange transactions or otherwise as we agree with the underwriters
or agents. The distribution agreement will provide that any common shares sold will be sold at prices related to the then prevailing
market prices for our common shares. Therefore, exact figures regarding proceeds that will be raised or commissions to be paid cannot
be determined at this time and will be described in a prospectus supplement. Pursuant to the terms of the distribution agreement, we
also may agree to sell, and the relevant underwriters or agents may agree to solicit offers to purchase, blocks of our common shares
or Warrants. The terms of each such distribution agreement will be set forth in more detail in a prospectus supplement to this prospectus.
In connection with offerings made through underwriters
or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding securities in consideration
for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell
securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions.
If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings
of securities.
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 indicates, in connection with those derivatives, such third parties (or affiliates of such third parties) may sell
securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, such third
parties (or affiliates of such third parties) 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 parties (or affiliates of such third parties) in such sale transactions will be
underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective
amendment).
We may loan or pledge securities to a financial
institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or third party
may transfer its short position to investors in our securities or in connection with a simultaneous offering of other securities offered
by this prospectus or in connection with a simultaneous offering of other securities offered by this prospectus.
LEGAL MATTERS
Certain legal matters with respect to Canadian
law and with respect to the validity of the offered securities under the law of British Columbia, Canada, will be passed upon for us
by Cassels Brock & Blackwell LLP. Certain legal matters with respect to New York law, the validity of the Debt Securities under New
York law, and U.S. federal securities law will be passed upon for us by Carmel, Milazzo & Feil LLP, New York, New York.
EXPERTS
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered
or upon other legal matters in connection with the registration or offering of the securities was employed on a contingency basis or
had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the Company or its subsidiaries.
Nor was any such person connected with the Company or any of its subsidiaries as a promoter, managing or principal underwriter, voting
trustee, director, officer or employee.
The consolidated financial statements for the
years ended December 31, 2021, 2020 and 2019 appearing in our Annual Reports on Form 20-F will been so included in reliance on the report
of our accountants, Davidson & Company LLP, an independent registered public accounting firm, given on the authority of said firm
as experts in auditing and accounting, and is incorporated herein by reference in reliance upon such report given on the authority of
such firm as experts in accounting and auditing.
ENFORCEMENT OF CIVIL LIABILITIES
UNDER U.S. SECURITIES LAWS
We are organized under the laws of British Columbia,
Canada. Service of process upon us and upon certain of our directors and officers and the experts named in this prospectus, who reside
outside the U.S., may be difficult to obtain within the U.S. Furthermore, because a substantial amount of our assets and certain of our
directors and officers are located outside the U.S., any judgment obtained in the U.S. against us or any of our directors and officers
may not be collectible within the U.S.
We have also been advised by Cassels Brock &
Blackwell LLP, our Canadian legal advisor, that there is doubt as to the enforceability, in original actions in Canadian courts, of liabilities
based on the U.S. federal securities laws or “blue sky” laws of any state within the United States and as to the enforceability
in Canadian courts of judgments of U.S. courts obtained in actions based on the civil liability provisions of the U.S. federal securities
laws or any such state securities or blue sky laws. Therefore, it may not be possible to enforce those judgments against us, certain
of our directors and officers, the experts named in this prospectus.
INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
We file annual and special reports and other
information with the Commission (File Number 001-39557). These filings contain important information which does not appear in this prospectus.
The Commission allows us to “incorporate by reference” information into this prospectus, which means that we can disclose
important information to you by referring you to other documents which we have filed or will file with the Commission. The information
incorporated by reference is considered to be part of this prospectus, and information in documents that we file later with the Commission
will automatically update and supersede information in this prospectus. We incorporate by reference into this prospectus the documents
listed below and any future filings made by us with the Commission under Section 13(a), 13(c) 15(d) of the Exchange Act, except
for information “furnished” to the Commission that is not deemed filed and not incorporated by reference into this prospectus
(unless otherwise indicated below), until the termination of the offering of securities described in the applicable prospectus supplement:
|
● |
our Annual Report on Form
20-F for the fiscal year ended on December 31, 2021, filed with the Commission on April 28, 2022 (the “Form 20-F”); |
|
● |
our Current Reports on Form 6-K furnished to the Commission on April
29, 2022, May 3, 2022, May
17, 2022, May 26, 2022,
May 31, 2022, May
31, 2022, June 7, 2022
and June 27, 2022 and the
“Selected Q1 Unaudited Financial Summary” portion of Exhibit
99.1 of our Current Report on Form 6-K furnished to the Commission on April 29, 2022; |
|
● |
the description of our securities registered under Section 12 of the Exchange Act contained
in the Form 8-A12B,
as filed with the Commission on September 24, 2020, including any amendment or report filed for the purpose of updating such description;
and |
|
● |
any future filings made with the Commission under Section 13(a), 13(c) or 15(d) of the Exchange Act. |
In addition, any reports on Form 6-K submitted
to the Commission by the registrant pursuant to the Exchange Act after the date of the initial registration statement and prior to effectiveness
of the registration statement that we specifically identify in such forms as being incorporated by reference into the registration statement
of which this prospectus forms a part and all subsequent Annual Reports on Form 20-F filed after the effective date of this registration
statement and prior to the termination of this offering and any reports on Form 6-K subsequently submitted to the Commission or portions
thereof that we specifically identify in such forms as being incorporated by reference into the registration statement of which this
prospectus forms a part, shall be considered to be incorporated into this prospectus by reference and shall be considered a part of this
prospectus from the date of filing or submission of such documents.
You should rely only on the information contained
or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not authorized any other person to
provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.
We are not making 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 any accompanying prospectus supplement as well as the information we previously filed
with the Commission and incorporated by reference, is accurate as of the dates on the front cover of those documents only. Our business,
financial condition and results of operations and prospects may have changed since those dates. Certain statements in and portions of
this prospectus update and replace information in the above listed documents incorporated by reference. Likewise, statements in or portions
of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus
or the above listed documents.
We will provide you without charge, upon your
written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents
which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to Siyata
Mobile Inc., Attn: Chief Financial Officer, 1001 Lenoir St Suite A-414, Montreal, QC H4C 2Z6 Canada. You may also obtain information
about us by visiting our website at https://www.siyatamobile.com. The information
contained on or accessible through our website is not incorporated by reference and is not part of this prospectus.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Commission a registration
statement on Form F-3 under the Securities Act of 1933, as amended, with respect to the securities offered by this prospectus. The full
registration statement may be obtained from the Commission or us, as provided below. Forms of the documents establishing the terms of
the offered securities are or may be filed as exhibits to the registration statement of which this prospectus forms a part. 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 at the Commission’s website, as provided below.
We are subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (“Exchange Act”) that are applicable to a foreign private issuer. In accordance
with the Exchange Act, we file reports and other information with the Commission, including Annual Reports on Form 20-F and reports on
Form 6-K. The Commission maintains an Internet site that contains reports and other information regarding issuers, such as us, that file
electronically with the Commission (http://www.sec.gov).
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors
and principal shareholders are exempt from the “short-swing profits” reporting and liability provisions contained in Section 16
of the Exchange Act and related Exchange Act rules. In addition, we are not required under the Exchange Act to file periodic reports
and financial statements with the Commission as frequently or as promptly as U.S. companies whose securities are registered under the
Exchange Act.
SIYATA MOBILE INC.
51,450,000 Common Shares
PROSPECTUS SUPPLEMENT
Maxim Group LLC
July 11, 2023
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