Company: EDSA
Filing Date: 2025-12-12
Form Type: 10-K
Source: 0001171843-25-007914
Chunk: 157

Company: Edesa Biotech, Inc.
Filing Date: 2025-12-12
Form: 10-K
Item: Item 1
Chunk 157
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 be entitled to receive, before any distribution or payment may be made with respect to the holders of our common shares, an amount equal to 100% of the stated value, plus a return equal to 10% of the stated value per Preferred Share per annum, calculated daily and (ii) a holder of the Series B-1 Preferred Shares will be entitled to receive, before any distribution or payment may be made with respect to common shares, an amount equal to 100% of the stated value.

Any issuance of our common shares upon conversion of our preferred shares will cause dilution to our then existing stockholders and may depress the market price of our common shares.

The Series A-1 Preferred Shares accrue an annual return equal to 10% of the stated value per Preferred Share payable by the issuance of our common shares at the conversion price upon a buy-back by the Company, liquidation or on conversion at the conversion price (calculated daily). Each Series A-1 Preferred Share is convertible into a number of our common shares calculated by dividing (i) the sum of the stated value of such Series A-1 Preferred Share plus a return equal to 10% of the stated value per Series A-1 Preferred Share per annum, calculated daily, by (ii) a fixed conversion price of $3.445.

Each Series B-1 Preferred Share is convertible into a number of our common shares calculated by dividing (i) the sum of the stated value of such Series B-1 Preferred Share by (ii) a fixed conversion price of $1.92.

The issuance of our common shares upon conversion of our preferred shares will result in immediate and substantial dilution to the interests of holders of our common shares, and such dilution will increase over time in connection with the accrual of the annual return on the Series A-1 Preferred Shares.

We may incur future indebtedness that will rank senior to our preferred shares or issue additional series of preferred shares that rank on a parity with, or senior to, the preferred shares as to dividend payments and liquidation preference.

We may incur substantial amounts of additional debt and other obligations that will rank senior to the preferred shares, and the terms of the preferred shares do not limit the amount of such debt or other obligations that we may incur. The terms of the preferred shares will not prohibit us from issuing additional series of preferred shares that would rank on parity with the preferred shares. The Articles allow for our Board to create new series of preferred shares without further approval by our shareholders, which could adversely affect