Company: EDSA
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001171843-25-003189
Chunk: 71

Company: Edesa Biotech, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 71
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 without shareholder approval in accordance with applicable Canadian securities laws.

The Series A-1 Purchase Agreement contains customary representations and warranties and agreements of the Company and the Series A-1 Purchaser and customary indemnification rights and obligations 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 relative 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 Convertible Preferred Shares

			Series A-1 Preferred Shares (#)

			Series A-1 Preferred Shares

			Six Months Ended March 31, 2025

			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

			-

			62,055

			Balance - March 31, 2025

			150

			$
			1,017,750

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 six months ended March 31, 2025, the Company sold a total of 304,057 Common Shares pursuant to the agreement