Company: EDSA
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001171843-25-000866
Chunk: 7

Company: Edesa Biotech, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 7
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 of the parties.

The Company has the option to redeem the Series A-1 Preferred Shares, and upon conversion or liquidation, holders are entitled to receive the stated value plus a 10% annual return on capital, payable in common shares at the conversion price, calculated daily until the three-year anniversary of issuance.

The Series A-1 Preferred Shares are presented as permanent shareholders’ equity. The total proceeds were allocated between the Series A-1 Preferred Shares and warrants using relatively fair value. The fair value of the Series A-1 Preferred Shares was determined as a reference to the fair value of common shares on the issuance date and the fair value of the warrants was determined using Black-Scholes option pricing model as detailed below.

The Series A-1 Convertible Preferred Shares did not exist in the comparative period; therefore, no prior-period disclosure is presented.

Issued and Outstanding Series A-1 Preferred Shares

			Series A-1

			Preferred Shares (#)

			Series A-1

			Preferred Shares

			Three Months Ended December 31, 2024

			Balance - September 30, 2024

			-

			-

			Issuance of Series A-1 Preferred Shares

			150

			$
			998,915

			Series A-1 Preferred Shares issuance costs

			-

			(43,220
			)

			Preferred return on Series A-1 Preferred Shares

			-

			25,479

			Balance - December 31, 2024

			150

			$
			981,174

Equity distribution agreements

In October 2024, the Company entered into an At The Market Offering Agreement with H.C. Wainwright & Co., LLC as a sales agent (HCW ATM) pursuant to which the Company may offer and sell, from time to time, common shares through an at-the-market equity offering program for up to $3.87 million in gross proceeds. The Company has no obligation to sell any of the common shares and may at any time suspend sales or terminate the equity distribution agreement in accordance with its terms.  For the three months ended December 31, 2024, the Company sold a total of 220,269 common shares pursuant to the agreement for net proceeds of $0.6 million after deducting sales agent commissions of $19,000. The Company has not sold any common shares pursuant to the HCW ATM subsequent to