UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule TO
(Amendment No. 1)
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
illumin Holdings Inc.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
Common Shares, without par value
(Title of Class of Securities)
00510L106
(CUSIP Number of Class of Securities)
Elliot Muchnik
Chief Financial Officer
illumin Holdings Inc.
70 University Ave., Suite 1200
Toronto, Ontario M5J 2M4
(416) 218-9888
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
Copies
to:
Brian M. Pukier
Stikeman Elliott LLP
5300 Commerce Court West
199 Bay Street
Toronto, Ontario M5L 1B9
(416) 869-5500
Michael J. Solecki
Jones Day
901 Lakeside Avenue
Cleveland, Ohio 44114-1190
(216) 586-3939
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Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
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third-party tender offer subject to Rule 14d–1. |
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issuer tender offer subject to Rule 13e–4. |
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going-private transaction subject to Rule 13e–3. |
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amendment to Schedule 13D under Rule 13d–2. |
Check the following box if the filing is a final amendment reporting the results of the tender
offer: ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s)
relied upon:
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Rule 13e–4(i) (Cross-Border Issuer Tender Offer) |
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Rule 14d–1(d) (Cross-Border Third-Party Tender Offer) |
This Amendment No. 1 (“Amendment No. 1”) amends and supplements the Tender
Offer Statement on Schedule TO originally filed with the Securities and Exchange Commission by illumin Holdings Inc., a corporation incorporated
under and governed by the Canada Business Corporations Act (“illumin” or the “Corporation”), on
July 27, 2023 (the “Schedule TO”) in connection with the offer by the Corporation to the holders of its common shares
(the “Shares”) to purchase up to an aggregate amount of Cdn$40,000,000 of the Shares at a price of not more than Cdn$2.65
per Share and not less than Cdn$2.53 per Share in cash, without interest.
The Corporation’s offer (the “Offer”) is being made upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated July 27, 2023 (the “Original Offer to Purchase”),
as amended and supplemented by the Supplement No. 1 to the Offer to Purchase, dated August 9, 2023 (the “Supplement”
and together with the Original Offer to Purchase, the “Offer to Purchase”) the accompanying Issuer Bid Circular (the
“Circular”), and the related Letter of Transmittal and Notice of Guaranteed Delivery which, collectively, as amended
or supplemented from time to time, constitute the “Tender Offer”.
The information in the Schedule TO, including all exhibits to the Schedule TO, which were previously
filed with the Schedule TO or any amendment thereto, is incorporated herein by reference in response to Items 1 through 11 of the Schedule
TO, except that such information is hereby amended and supplemented to the extent specifically provided in this Amendment No. 1. All capitalized
terms used but not specifically defined in this Amendment No. 1 shall have the meanings given to such terms in the Original Offer to Purchase
and the Circular. The items of the Schedule TO set forth below are hereby amended and supplemented as follows:
Items 1 – 11
Items 1 – 11 are hereby amended and updated by the Supplement No. 1 to the Offer to Purchase,
dated May 31, 2022, which is incorporated herein by reference.
Item 12. Exhibits.
The Original Offer to Purchase is being refiled with this Amendment No. 1 to include the Liquidity
Opinion referenced in the Original Offer to Purchase, which was inadvertently omitted from the Original Offer to Purchase filed as exhibit
(a)(1)(A) to the Schedule TO.
* Previously filed.
Item 13. Information Required by Schedule 13E-3.
Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information
set forth in this statement is true, complete and correct.
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ILLUMIN HOLDINGS INC. |
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By: |
/s/ Elliot Muchnik |
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Name: |
Elliot Muchnik |
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Title: |
Chief Financial Officer |
Date: August 9, 2023
Exhibit (a)(1)(A)
This document is important and requires your
immediate attention. If you are in any doubt as to how to deal with it, you are urged to consult your broker, dealer, bank manager, lawyer,
accountant or other professional advisor. This document does not constitute an offer or a solicitation to any person in any jurisdiction
in which such offer or solicitation is unlawful. The Offer is not being made to Shareholders in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the laws of that jurisdiction. However, illumin may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and to extend this Offer to Shareholders in such jurisdiction
in accordance with applicable laws.
This Offer has not been approved by any securities
regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of the Offer or upon the adequacy
of the information contained in this document. Any representation to the contrary is an offence.
OFFER TO PURCHASE FOR NOT MORE THAN $40,000,000
UP TO 15,810,276 OF ITS COMMON SHARES AT A PURCHASE PRICE OF NOT LESS THAN $2.53 AND NOT MORE THAN $2.65 PER COMMON SHARE
illumin Holdings Inc. (“illumin”,
the “Corporation”, “we” or “us”) invites its shareholders (“Shareholders”)
to tender, for purchase and cancellation by the Corporation, common shares of the Corporation (“Shares”) pursuant to
(i) auction tenders in which the tendering Shareholders specify a price of not less than $2.53 per Share and not more than $2.65 per Share
in increments of $0.01 per Share (“Auction Tenders”), or (ii) purchase price tenders in which the tendering Shareholders
do not specify a price per Share, but rather agree to have Shares purchased at the Purchase Price (as defined below) that is determined
as provided herein (“Purchase Price Tenders”). The invitation and all tenders of Shares are subject to the terms and
conditions set forth in this offer to purchase (the “Offer to Purchase”), the accompanying Issuer Bid Circular (the
“Circular”) and the related Letter of Transmittal and Notice of Guaranteed Delivery (which together constitute the
“Offer”).
The Offer will commence on the date set forth
below and expire at 5:00 p.m. (Eastern time) on August 30, 2023, unless withdrawn, extended or varied by illumin (such time and such
date, the “Expiration Time” and the “Expiration Date”, respectively). Beneficial owners should be
aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines for participation
in the Offer. The Offer is not conditional upon the receipt of financing or any minimum number of Shares being tendered. The Offer is,
however, subject to other conditions and illumin reserves the right, subject to applicable laws, to withdraw the Offer and not take up
and pay for any Shares tendered under the Offer if certain events occur. See “Offer to Purchase – Conditions of the Offer”.
Promptly following the Expiration Date, the Corporation
will determine a single price per Share (the “Purchase Price”), taking into account the total number of Shares tendered
and the prices specified, or deemed specified, by the tendering Shareholders, which will not be less than $2.53 per Share and not more
than $2.65 per Share, that is the lowest price that enables it to purchase the maximum number of Shares properly tendered and not withdrawn
pursuant to the Offer having an aggregate Purchase Price not exceeding $40,000,000. If the Purchase Price is determined to be $2.53 (which
is the minimum Purchase Price under the Offer), the maximum number of Shares that may be purchased by the Corporation is 15,810,276 Shares.
If the Purchase Price is determined to be $2.65 (which is the maximum Purchase Price under the Offer), the maximum number of Shares that
may be purchased by the Corporation is 15,094,339 Shares. For the purpose of determining the Purchase Price, Shares tendered pursuant
to a Purchase Price Tender will be considered to have been tendered at $2.53 per Share (which is the minimum Purchase Price under the
Offer). All Shares purchased under the Offer will be purchased at the same Purchase Price, even if some Shares are tendered below the
Purchase Price. However, Shares tendered by a Shareholder pursuant to an Auction Tender will not be purchased by the Corporation pursuant
to the Offer if the price specified by the Shareholder is greater than the Purchase Price. A Shareholder who wishes to tender Shares,
but who does not wish to specify a price at which such Shares may be purchased by the Corporation, should make a Purchase Price Tender.
Shareholders who tender Shares without making a valid Auction Tender or Purchase Price Tender will be deemed to have made a Purchase Price
Tender, understanding that for the purpose of determining the Purchase Price, Shares tendered pursuant to a Purchase Price Tender will
be considered to have been tendered at the minimum price of $2.53 per Share. Each Shareholder should understand that making a Purchase
Price Tender may cause the Purchase Price to be lower than would otherwise be the case.
Each Shareholder who has properly tendered
Shares pursuant to an Auction Tender at or below the Purchase Price or pursuant to a Purchase Price Tender, and who has not properly withdrawn
such Shares, will receive the Purchase Price, payable in cash (subject to applicable withholding taxes, if any), for all Shares purchased,
on the terms and subject to the conditions of the Offer, including the provisions relating to pro-ration described herein.
If the aggregate Purchase Price for Shares properly
tendered and not withdrawn pursuant to the Offer by Purchase Price Tender or by Auction Tender at or below the Purchase Price (the “Successfully
Tendered Shares”) by Shareholders (the “Successful Shareholders”) exceeds $40,000,000, then the Successfully
Tendered Shares will be purchased on a pro rata basis according to the number of Shares tendered (or deemed to be tendered) by the Successful
Shareholders (with adjustments to avoid the purchase of fractional Shares), except that “Odd Lot” tenders (as described herein)
will not be subject to pro-ration. See “Offer to Purchase – Number of Shares and Pro-Ration”.
The Purchase Price and the aggregate amount payable
to the tendering Shareholders (net of applicable withholding taxes, if any) will be denominated in Canadian dollars. The Corporation will
pay for Shares tendered in Canadian dollars. See “Offer to Purchase – Taking Up and Payment for Tendered Shares”.
All tendered Shares not purchased, including all
Shares tendered pursuant to Auction Tenders at prices greater than the Purchase Price, Shares not purchased due to pro-ration and Shares
not accepted for purchase, will be returned to the tendering Shareholder promptly after the Expiration Date or termination of the Offer
without expense to the tendering Shareholder.
As of July 25, 2023, there were 56,185,631 Shares
issued and outstanding and, accordingly, the Offer is for a maximum of approximately 28.14% of the total number of issued and outstanding
Shares if the Purchase Price is determined to be $2.53 (being the minimum Purchase Price under the Offer), and for approximately 26.87%
if the Purchase Price is determined to be $2.65 (being the maximum Purchase Price under the Offer).
Shares are listed and posted for trading on the
Toronto Stock Exchange (the “TSX”) and The Nasdaq Stock Market (“Nasdaq”) under the symbol ‘ILLM’.
On July 25, 2023, the date prior to the announcement of the Corporation’s intention to proceed with a substantial issuer bid, the
closing price on the TSX was $2.37 per Share and on Nasdaq was US$1.81 per Share. Shareholders are urged to obtain current market quotations
for Shares.
The Corporation’s board of directors (the
“Board of Directors” or the “Board”) has approved the Offer. Furthermore, the Board of Directors
has concluded that the Corporation can rely on the “liquid market exemption” specified in Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions (“MI 61-101”) from the requirement to obtain a
formal valuation that would otherwise be applicable to the Offer. While not required under applicable securities laws, the Board of Directors
has voluntarily obtained a liquidity opinion (the “Liquidity Opinion”) from Canaccord Genuity Corp. (“Canaccord
Genuity”) to the effect that, as of July 26, 2023, based on and subject to the qualifications, assumptions and limitations stated
in the Liquidity Opinion: (a) a liquid market for Shares exists; and (b) it is reasonable to conclude that, following the completion of
the Offer in accordance with its terms, there will be a market for holders of Shares who do not tender to the Offer that is not materially
less liquid than the market that existed at the time of the making of the Offer. A copy of the Liquidity Opinion is attached hereto as
Schedule A. The summary of the Liquidity Opinion herein is qualified in its entirety by reference to the full text of the Liquidity Opinion.
The Board of Directors urges Shareholders to read the Liquidity Opinion in its entirety. The Liquidity Opinion is not a recommendation
as to whether or not Shareholders should tender or refrain from tendering any or all of such Shareholder’s Shares pursuant to the
Offer.
However, none of illumin, its Board of Directors,
Canaccord Genuity, in its capacity as the Canadian dealer manager for the Offer, Canaccord Genuity LLC (“Canaccord Genuity US”),
the U.S. dealer manager for the Offer (together with Canaccord Genuity, the “Dealer Managers”), or TSX Trust Company,
the depositary for the Offer (the “Depositary”), makes any recommendation to any Shareholder as to whether to tender
or refrain from tendering Shares under the Offer, whether Shareholders should elect an Auction Tender or a Purchase Price Tender, or as
to the purchase price or purchase prices at which Shareholders may tender Shares under the Offer. Shareholders must make their own decisions
as to whether to tender Shares under the Offer, and, if so, how many Shares to tender and the price or prices at which to tender. The
Corporation’s directors and executive officers have advised the Corporation that they do not intend to tender Shares under the Offer.
Shareholders should carefully consider all
relevant factors with their own financial advisors, including the income tax consequences of tendering Shares under the Offer. For some
Shareholders, the income tax treatment of selling Shares to the Corporation under the Offer may be materially different from the income
tax treatment of selling Shares in the market. See “Issuer Bid Circular – Income Tax Consequences”.
Shareholders wishing to tender all or any portion
of their Shares pursuant to the Offer must comply in all respects with the delivery procedures described herein. See “Offer to
Purchase – Procedure for Tendering Shares”.
| The Offer expires at 5:00 p.m. (Eastern time) on August 30, 2023 unless withdrawn, extended or varied. |
OUR BOARD OF DIRECTORS HAS AUTHORIZED US TO
MAKE THE OFFER, HOWEVER, NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE CORPORATION OR THE BOARD OF DIRECTORS
AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR WHETHER SHAREHOLDERS SHOULD ELECT AN
AUCTION TENDER OR A PURCHASE PRICE TENDER. OUR DELIVERY OF THIS OFFER TO PURCHASE SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE, THE CIRCULAR, THE LETTER OF TRANSMITTAL OR THE NOTICE OF GUARANTEED DELIVERY
IS CORRECT AS OF ANY TIME OTHER THAN THE DATE OF THIS OFFER TO PURCHASE OR THAT THERE HAVE BEEN NO CHANGES IN THE INFORMATION INCLUDED
OR INCORPORATED BY REFERENCE HEREIN OR THE AFFAIRS OF ILLUMIN OR ANY OF ITS SUBSIDIARIES OR AFFILIATES SINCE THE DATE HEREOF. NO PERSON
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN AS SET FORTH IN THIS
OFFER. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION, THE BOARD OF DIRECTORS, THE DEALER MANAGERS OR THE DEPOSITARY.
No Canadian, U.S. or foreign commission has
approved or disapproved of this Offer or passed upon the merits or fairness of this Offer or passed upon the adequacy or accuracy of the
information contained in this document. Any representation to the contrary is unlawful and may be a criminal offense.
Any questions or requests for information regarding
the Offer should be directed to the Depositary or the Dealer Managers at the addresses, telephone and facsimile numbers of the Depositary
and the Dealer Managers set forth below. You may request additional copies of this Offer to Purchase, the Circular and the related Letter
of Transmittal and Notice of Guaranteed Delivery from the Depositary, which will promptly furnish to Shareholders additional copies of
these materials at the Corporation’s expense.
The Dealer Managers for the Offer are:
In Canada:
Canaccord Genuity
Corp.
40
Temperance Street, Suite 2100
Toronto,
Ontario
M5H
0B4
Email: ecm@cgf.com
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In
the United States:
Canaccord Genuity
LLC
99
High Street, 12th Floor
Boston,
MA
02110
Email: ecm@cgf.com
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The Depositary for the Offer is:
TSX Trust Company
301 – 100 Adelaide St W
Toronto, ON M5H 4H1
Attention: Corporate Actions
Telephone: 416-342-1091
Toll Free: 1-866-600-5869
E-mail: tsxtis@tmx.com |
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INFORMATION FOR UNITED STATES SHAREHOLDERS
The Corporation has filed with the U.S. Securities
and Exchange Commission (the “SEC”) a Schedule TO with respect to the Offer, pursuant to Section 13(e)(1) of the U.S.
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13e-4(c)(2) promulgated thereunder. See
“Offer to Purchase – Additional Information”.
THE OFFER HAS NOT BEEN APPROVED BY THE SEC OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE OFFER OR
UPON THE ACCURACY OF THE INFORMATION CONTAINED IN THIS OFFER TO PURCHASE AND THIS CIRCULAR AND ANY RELATED DOCUMENTS, AND ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL AND MAY BE A CRIMINAL OFFENSE.
The enforcement by Shareholders of civil liabilities
under U.S. federal and state securities laws may be adversely affected by the fact that illumin is incorporated under the federal laws
of Canada, that some of its officers and directors and some of the experts named in this Offer to Purchase and this Circular are residents
of countries other than the United States, and that a substantial portion of the assets of illumin and such persons are located outside
the United States. It may be difficult to effect service of process on illumin, its officers and directors and the experts named in this
Offer to Purchase and this Circular. In addition, U.S. Shareholders should not assume that courts in Canada or in the countries where
such directors and officers reside or in which illumin’s non-U.S. assets or the assets of such persons are located (i) would enforce
judgments of U.S. courts obtained in actions against illumin or such persons predicated upon civil liability provisions of U.S. federal
or state securities laws as may be applicable, or (ii) would enforce, in original actions, any asserted liabilities against illumin, its
subsidiaries or such persons predicated upon such laws. Enforcement of any asserted civil liabilities under U.S. securities laws may be
further adversely affected by the fact that some or all of the experts named in the Offer may be residents of Canada.
United States Shareholders should be aware that
the acceptance of the Offer will have certain tax consequences under United States and Canadian law. See “Issuer Bid Circular –
Income Tax Consequences”. Shareholders should consult their own tax advisors with respect to their particular circumstances and
tax considerations applicable to them.
The Corporation is a “foreign private issuer”
within the meaning of Rule 3b-4 under the Exchange Act. Consequently, illumin is subject to the reporting requirements under the Exchange
Act applicable to foreign private issuers and is not required to file periodic reports and financial statements with the SEC as frequently
or as promptly as a U.S. company whose securities are registered under the Exchange Act and is also be exempt from the rules and regulations
under the Exchange Act related to the furnishing and content of proxy statements. The Corporation is also not be required to comply with
Regulation FD, which addresses certain restrictions on the selective disclosure of material information. In addition, among other matters,
illumin officers, directors and principal shareholders are be exempt from the reporting and “short-swing” profit recovery
provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of Shares.
Additionally, Nasdaq rules allow foreign private issuers to follow home country practices in lieu of certain of Nasdaq’s corporate
governance rules. As a result, Shareholders may not have the same protections afforded to shareholders of companies that are subject to
all of the SEC’s rules and Nasdaq corporate governance requirements applicable to U.S. public companies.
FORWARD-LOOKING INFORMATION
This Offer to Purchase and this Circular contains
forward-looking information and forward-looking statements within the meaning of applicable Canadian and U.S. securities laws (collectively
referred to herein as “forward-looking information”). Words such as “may”, “will”, “expect”,
“believe”, “anticipate”, “intend”, “could”, “estimate”, “continue”,
or the negative or comparable terminology are intended to identify forward-looking information. In addition, any statements that refer
to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates
and projections regarding future events or circumstances. Forward-looking information is information other than historical information
or information of current condition, that includes, but is not limited to, information respecting: the number of Shares that the Corporation
may purchase in the Offer; the price range and the date on which the Corporation will announce the final results of the Offer or pay for
tendered Shares; the timelines anticipated for the Offer; the Corporation’s ability to complete the Offer on the timelines anticipated;
the Corporation’s belief that the purchase of Shares under the Offer represents an equitable and efficient means of distributing
cash to Shareholders who elect to tender; the Corporation’s expectation that it will fund any purchases of Shares pursuant to the
Offer from cash on hand; the Corporation continuing to have sufficient financial resources and working capital and the Offer not being
expected to preclude the Corporation from pursuing its foreseeable business opportunities or the future growth of the Corporation’s
business; the market for Shares not being materially less liquid than the market that exists at the time of the making of the Offer; and
future purchases of additional Shares following expiry of the Offer, if any. This should not be considered a complete list of all factors
that could affect the Corporation and the Offer. When relying on forward-looking statements to make decisions with respect to tendering
to the Offer, you should carefully consider these factors, as well as other uncertainties and potential events and the inherent uncertainty
of forward-looking statements.
Forward-looking information involves known and
unknown risks, uncertainties and other factors that may cause actual results to differ materially from those in forward-looking information
due to various factors. All of the forward-looking information contained herein is qualified by the assumptions that are stated or inherent
in such forward-looking information, including the assumptions listed below. Although illumin believes that these assumptions are reasonable,
this list is not exhaustive of the factors that may affect any of the forward-looking information and the reader should not place an undue
reliance on these assumptions and such forward-looking information. The key assumptions that have been made in connection with the forward-looking
information include; the general continuance of current or, where applicable, assumed operational, regulatory and industry conditions;
and expectations and projections made in light of, and generally consistent with, illumin’s historical experience and its perception
of historical trends. Despite a careful process to prepare and review the forward looking information, there can be no assurance that
the underlying assumptions will prove to be correct.
Risks and uncertainties that may affect these
outcomes include: uncertainty in the level of Shareholder participation in the Offer; failure to complete the Offer due to conditions
to the Offer not being satisfied or waived; the market for Shares not being materially less liquid after the completion of the Offer than
the market that exists at the time of the Offer; future financial performance; future cash flow and liquidity; future capital investment;
our ability to generate sufficient cash flow to meet obligations, operate our business, remain in compliance with debt covenants and make
payments on our indebtedness; future fluctuations of financial results due to: changes in demand for the illuminTM platform,
changes in illumin’s pricing policies, the pricing policies of its competitors and the pricing or availability of inventory, data
or other third-party services, changes in illumin’s customer base and platform offerings, the addition or loss of advertising agencies
and marketers as customers, changes in advertising budget allocations, agency affiliations or marketing strategies, changes to illumin’s
channel mix, changes and uncertainty in the regulatory and business environment for illumin or its customers, changes in the economic
prospects of marketers or the economy generally, which could alter marketers’ spending priorities, or could increase the time or
costs required to complete advertising inventory sales, changes in the availability of advertising inventory or in the cost of reaching
end consumers through digital advertising, disruptions or outages on illumin’s platforms, changes in illumin’s capital expenditures
as it acquires the hardware, equipment and other assets required to support its business, timing differences between our payments for
advertising inventory and our collection of related advertising revenue, the length and unpredictability of illumin’s sales cycle,
costs related to acquisitions of business or technologies, or employee recruiting and shifting views and behaviors of consumers concerning
the use of data; increased use of competitive products; the increased use of free or paid “ad-blocking” software by consumers;
decreased use of third-party cookies for tracking by vendors and software platforms; potential government regulations and/or privacy legislation
implementing a “Do Not Track” standard and consumers adopting such preferences; unfavourable developments in connection with
the potential further regulation of personal information; risks associated with technology, including electronic, cyber and physical security
breaches; inability to product illumin’s proprietary offering; illumin may infringe third-party proprietary and/or intellectual
property right; risks associated with illumin’s use of “open source” software; changes in consumer’s use of social
media platforms could impact how illumin gathers and uses social data; currency fluctuations, including an increase in the value of the
Canadian dollar against the U.S. dollar; a protracted global recession or depression; risks associated with existing and potential lawsuits
and regulatory actions made against the Corporation; impact of disputes arising with its partners; the risks associated with the advertising
industry generally; changes in general economic conditions, including as a result of a pandemic or the current conflict between Russia
and Ukraine; risks associated with inflation rates; and other risks inherent to the operations and financial health of the Corporation.
This should not be considered a complete list of all factors that could affect the Corporation and the Offer. When relying on forward-looking
statements to make decisions with respect to tendering to the Offer, readers should carefully consider these factors, as well as other
uncertainties and potential events and the inherent uncertainty of forward-looking statements. You should review the factors and risks
described in the reports we will file from time to time with the SEC through the SEC’s Electronic Document Gathering and Retrieval
System (“EDGAR”), which may be accessed at www.sec.gov and on the Corporation’s System for Electronic Data Analysis
and Retrieval + (“SEDAR+”) profile at www.sedarplus.com after the date of this Offer to Purchase and this Circular.
All of the forward-looking information contained
in this Offer to Purchase and this Circular is expressly qualified by the foregoing cautionary statements. Accordingly, you should not
rely on these forward-looking statements, which speak only as of the date of this Offer to Purchase and this Circular. We undertake no
obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this Offer to Purchase
and this Circular or to reflect the occurrence of unanticipated events. You should read this entire Offer to Purchase and this Circular
and consult your own professional advisors to ascertain and assess the income tax, legal, risk factors and other aspects of the Offer
or their investment in Shares.
Although we believe the expectations reflected
in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance
or achievements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the
forward looking statements contained in this Offer to Purchase and this Circular and any subsequent written or oral forward-looking statements
that may be issued by the Corporation or persons acting on its behalf.
NOTICE TO HOLDERS OF OPTIONS
The Offer is made only for Shares and not made
for any options to acquire Shares (“Options”). Any holder of Options who wishes to accept the Offer should, to the
extent permitted by the terms thereof, fully exercise such Options in order to tender the resulting Shares in accordance with the terms
and conditions of the Offer. Any such exercise must occur sufficiently in advance of the Expiration Date to enable holders of Options
to have sufficient time to comply with the procedures for tendering Shares in the Offer. An exercise of an Option cannot be revoked even
if Shares received upon exercise thereof and tendered in the Offer are not purchased in the Offer for any reason. No recommendation is
being made as to whether any holder of Options should exercise such Options in order to tender the resulting Shares in accordance with
the terms and conditions of the Offer.
Holders of Options that exercise such Options
and then tender Shares received on such exercise pursuant to the Offer could suffer adverse tax consequences. The tax consequences of
such an exercise are not described under the “Issuer Bid Circular – Income Tax Consequences”. Holders of Options are
urged to seek tax advice from their own tax advisors in this regard.
CURRENCY AND EXCHANGE RATE
All dollar references in this Offer to Purchase
and this Circular are in Canadian dollars ($), except where otherwise indicated.
The following table sets forth, for each fiscal
year indicated, the high and low exchange rates for one U.S. dollar (US$) expressed in Canadian dollars, the average of such exchange
rates during such periods, and the exchange rate at the end of the period, in each case, based upon the Bank of Canada’s daily average
exchange rates.
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Year ended December 31 |
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2022 | |
2021 | |
2020 |
| High | |
| 1.3856 | | |
| 1.2942 | | |
| 1.4496 | |
| Low | |
| 1.2451 | | |
| 1.2040 | | |
| 1.2718 | |
| Average | |
| 1.3011 | | |
| 1.2535 | | |
| 1.3415 | |
| Period End | |
| 1.3544 | | |
| 1.2678 | | |
| 1.2732 | |
The following table sets forth, for the first
and second quarter of fiscal 2023, the high and low exchange rates for one U.S. dollar (US$) expressed in Canadian dollars, the average
of such exchange rates during such periods, and the exchange rate at the end of the period, in each case, based upon the Bank of Canada’s
daily average exchange rates.
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Fiscal 2023 |
| | |
Q1 | |
Q2 |
| High | |
| 1.3807 | | |
| 1.3628 | |
| Low | |
| 1.3312 | | |
| 1.3151 | |
| Average | |
| 1.3526 | | |
| 1.3430 | |
| Period End | |
| 1.3533 | | |
| 1.3240 | |
On July 25, 2023, the exchange rate for one U.S.
dollar expressed in one Canadian was 1.3184 based upon the Bank of Canada daily average exchange rate.
ADDITIONAL INFORMATION
Availability of Reports and Other Information.
The Corporation is subject to the continuous disclosure requirements of applicable Canadian securities legislation and the rules of the
TSX and Nasdaq, as well as the reporting requirements of the Exchange Act, and in accordance therewith, files periodic reports and other
information with Canadian provincial and territorial securities regulators, the TSX, Nasdaq and the SEC relating to illumin’s business,
financial condition and other matters. As required by Exchange Act Rule 13e-4(c)(2), we have also filed with the SEC a Schedule TO, which
includes additional information relating to the Offer. Shareholders may access documents filed with Canadian provincial and territorial
securities regulators through the Corporation’s SEDAR+ profile at www.sedarplus.com. Shareholders may access documents filed with
or furnished to the SEC through EDGAR, which may be accessed at www.sec.gov.
Historical Financial Information.
The Corporation’s consolidated financial statements are reported in Canadian dollars and have been prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board. The audited consolidated financial statements
of illumin for the years ended December 31, 2022, 2021 and 2020, which are available on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov
and will be sent to a Shareholder without charge upon request to the Corporation at Suite 1200, 70 University Avenue, Toronto, Ontario
M5J 2M4, Attention: Chief Financial Officer.
Pursuant to Rule 13e-4(c)(2) under the Exchange
Act, illumin has filed with the SEC a Schedule TO which contains additional information with respect to the Offer. This Offer to Purchase
and this Circular, which constitutes a part of the Schedule TO, does not contain all of the information set forth in the Schedule TO.
The Corporation has not authorized any person
to make any recommendation on its behalf as to whether a Shareholder should tender or refrain from tendering its Shares to the Offer,
whether Shareholders should elect an Auction Tender or a Purchase Price Tender, or as to the price or prices at which any Shareholder
may choose to tender its Shares under the Offer. Shareholders should rely only on the information contained in this document. The Corporation
has not authorized anyone to provide Shareholders with information or to make any representation in connection with the Offer other than
those contained in this Offer to Purchase, the Circular or in the related Letter of Transmittal or Notice of Guaranteed Delivery. If anyone
makes any recommendation or gives any information or representation, Shareholders must not rely upon that recommendation, information
or representation as having been authorized by the Corporation, its Board of Directors, the Dealer Managers or the Depositary. We also
urge Shareholders to consult their own financial, legal, investment and tax advisors.
Information on or connected to our website,
even if referred to in documents incorporated by reference in this Offer to Purchase and this Circular, do not constitute part of this
Offer to Purchase and this Circular.
Unless another date is specified herein, Shareholders
should not assume that the information contained in or incorporated by reference in this Offer to Purchase and this Circular is accurate
as of any date other than the date of this Offer to Purchase and this Circular.
TABLE OF CONTENTS
| SUMMARY |
2 |
| OFFER TO PURCHASE |
1 |
| 1. | The Offer |
1 |
| 2. | Purchase Price |
2 |
| 3. | Number of Shares and Pro-Ration |
2 |
| 4. | Announcement of Purchase Price, Number of Shares Validly Tendered and Aggregate Purchase Price |
3 |
| 5. | Procedure for Tendering Shares |
3 |
| 6. | Withdrawal Rights |
7 |
| 7. | Conditions of the Offer |
9 |
| 8. | Extension and Variation of the Offer |
12 |
| 9. | Taking Up and Payment for Tendered Shares |
13 |
| 10. | Payment in the Event of Mail Service Interruption |
14 |
| 11. | Liens and Dividends |
15 |
| 12. | Notice |
15 |
| 13. | Other Terms |
15 |
| ISSUER BID CIRCULAR |
17 |
| 1. | illumin Holdings Inc. |
17 |
| 2. | Authorized Capital |
17 |
| 3. | Purpose and Effect of the Offer |
17 |
| 4. | Withdrawal Rights |
21 |
| 5. | Price Range and Trading Volume of Shares |
21 |
| 6. | Dividend Policy |
23 |
| 7. | Previous Distributions and Purchases of Securities |
23 |
| 8. | Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Shares |
24 |
| 9. | Material Changes in the Affairs of the Corporation |
28 |
| 10. | Valuation and Bona Fide Prior Offers |
29 |
| 11. | Accounting Treatment of the Offer |
29 |
| 12. | Income Tax Consequences |
29 |
| 13. | Legal Matters and Regulatory Approvals |
39 |
| 14. | Source of Funds |
39 |
| 15. | Dealer Managers |
39 |
| 16. | Depositary |
40 |
| 17. | Fees and Expenses |
40 |
| 18. | Statutory Rights |
40 |
| APPROVAL AND CERTIFICATE |
41 |
| CONSENT OF CANACCORD GENUITY CORP. |
42 |
| SCHEDULE A LIQUIDITY OPINION OF CANACCORD GENUITY CORP. |
A-1 |
| SUMMARY |
| |
This summary is solely for the convenience of
Shareholders and is qualified in its entirety by references to the full text and more specific details of the Offer and the accompanying
Circular. We urge you to read the entire Offer to Purchase, Circular, Letter of Transmittal and Notice of Guaranteed Delivery carefully
and in their entirety as they contain a complete discussion of the Offer. We have included in this summary references to sections of certain
of these documents where you will find a more complete description of the topics summarized below.
|
| |
|
| Who is offering to purchase my Shares? |
illumin Holdings Inc., which we refer to as “we”, “us”, “illumin” or the “Corporation”.
|
| Why is illumin making the Offer? |
We continuously consider ways to enhance Shareholder value. Following a thoughtful review of the capital required for our operational and strategic investment needs, we have determined that the Corporation has excess cash that is available to return to Shareholders. We believe that the purchase of Shares under the Offer represents an attractive investment by the Corporation and an equitable and efficient means to distribute an aggregate of up to $40,000,000 to Shareholders who elect to tender, while at the same time proportionately increasing the equity interest in the Corporation of Shareholders who do not elect to tender, and that the Offer is in the best interests of the Corporation and its Shareholders. Furthermore, the Corporation has re-evaluated the continued benefits and costs of its listing on Nasdaq and has concluded that it is appropriate to delist from Nasdaq as soon as practical following the expiry of the Offer. The Offer provides U.S. Shareholders with an opportunity for liquidity at a premium well in advance of such delisting from Nasdaq. See “Issuer Bid Circular – Purpose and Effect of the Offer”.
|
| What will the Purchase Price for Shares be and what will be the form of payment? |
We are conducting the Offer through a procedure commonly called a “Dutch auction”. This procedure allows Shareholders to select the price within a price range specified by illumin at which Shareholders are willing to sell their Shares. The price range for the Offer is $2.53 to $2.65 per Share. We will select the lowest Purchase Price that will allow us to purchase the maximum number of Shares properly tendered and not withdrawn pursuant to the Offer having an aggregate Purchase Price not exceeding $40,000,000. We will purchase all Shares purchased under the Offer at the same Purchase Price, even if some Shares are tendered below the Purchase Price, but we will not purchase any Shares above the Purchase Price. We will determine the Purchase Price for the tendered Shares promptly after the Offer expires. Shareholders who tender Shares without making a valid Auction Tender or Purchase Price Tender will be deemed to have made a Purchase Price Tender, understanding that for the purpose of determining the Purchase Price, Shares tendered pursuant to a Purchase Price Tender will be considered to have been tendered at the minimum price of $2.53 per Share. If a Shareholder’s Shares are purchased under the Offer, that Shareholder will be paid the Purchase Price (subject to applicable withholding taxes, if any) in cash, without interest, promptly following the expiration of the Offer. Under no circumstances will we pay interest on the Purchase Price, even if there is a delay in making payment. See “Offer to Purchase – Purchase Price”. |
| How many Shares will illumin purchase in the Offer? |
We are offering to purchase Shares that have an
aggregate Purchase Price not exceeding $40,000,000. At the maximum Purchase Price of $2.65 per Share, we could purchase 15,094,339 Shares.
At the minimum Purchase Price of $2.53 per Share,
we could purchase 15,810,276 Shares. Since we will be unable to determine the Purchase Price until after the Expiration Date, we will
not determine the exact number of Shares that we will purchase until after the Expiration Date. See “Offer to Purchase – Number
of Shares and Pro-Ration”.
|
| What will happen if Shares with an aggregate Purchase Price of more than $40,000,000 are tendered in the Offer? |
If the aggregate Purchase Price for Shares properly tendered and not withdrawn pursuant to the Offer by Purchase Price Tender or by Auction Tender at or below the Purchase Price exceeds $40,000,000, then we will purchase the Successfully Tendered Shares on a pro rata basis according to the number of Shares tendered (or deemed to be tendered) by the Successful Shareholders (with adjustments to avoid the purchase of fractional Shares), except that “Odd Lot” tenders will not be subject to pro-ration. See “Offer to Purchase – Number of Shares and Pro-Ration”.
|
| What do I do if I own an “Odd Lot” of Shares? |
If you beneficially own fewer than 100 Shares as of the Expiration Date and you tender all such Shares, we will accept for purchase, without pro-ration but otherwise subject to the terms and conditions of the Offer, all of your Shares tendered pursuant to an Auction Tender at or below the Purchase Price or pursuant to a Purchase Price Tender. You should check the appropriate place in Box D – “Odd Lots” in the Letter of Transmittal. Furthermore, partial tenders will not qualify for this preference and this preference is not available to a Shareholder who holds separate certificates for fewer than 100 Shares or holds fewer than 100 Shares in different accounts if such Shareholder beneficially owns in the aggregate 100 or more Shares. See “Offer to Purchase – Number of Shares and Pro-Ration”.
|
| How can I maximize the chance that my Shares will be purchased? |
If you wish to maximize the chance that your Shares will be purchased, you should tender them by “Purchase Price Tender”, indicating that you will accept the Purchase Price that we select. You should understand that this election will have the same effect as if you have selected the minimum Purchase Price of $2.53 per Share.
|
| How will illumin pay for Shares? |
We intend to fund any purchases of Shares pursuant to the Offer from cash on hand. The Offer is not conditional upon the receipt of financing. See “Issuer Bid Circular – Source of Funds”.
|
| How long do I have to tender my Shares? |
You may tender your Shares until the Offer expires. The Offer will expire on August 30, 2023 at 5:00 p.m. (Eastern time), unless we extend it. We may choose to extend the Offer at any time and for any reason, subject to applicable laws. See “Offer to Purchase – Extension and Variation of the Offer”. If a broker, dealer, commercial bank, trust company or other nominee holds your Shares, it is likely that, for administrative reasons, it has an earlier deadline for you to act to instruct them to tender Shares on your behalf. We urge you to contact your broker, dealer, commercial bank, trust company or other nominee to confirm any earlier deadline. The Corporation will not provide for any subsequent offering period following the Expiration Date. See “Offer to Purchase – The Offer” and “Offer to Purchase – Extension and Variation of the Offer”.
|
| Are there any conditions to the Offer? |
Yes. The Offer is subject to a number of conditions, such as the absence of court and governmental action prohibiting the Offer and changes in general market conditions that, in our judgment, are or may be materially adverse to us. See “Offer to Purchase – Conditions of the Offer”.
|
| How do I tender my Shares? |
To tender Shares pursuant to the Offer, you must (i) deliver by the Expiration Date the certificates for all tendered Shares in proper form for transfer and/or Shares held through the Direct Registration System (“DRS”), together with a properly completed and duly executed Letter of Transmittal (with signatures that are guaranteed if so required in accordance with the Letter of Transmittal), and any other documents required by the Letter of Transmittal, to the Depositary, at one of the addresses listed in the Letter of Transmittal, (ii) follow the guaranteed delivery procedure described under “Offer to Purchase – Procedure for Tendering Shares”, or (iii) transfer all tendered Shares pursuant to the procedures for book-entry transfer described under “Offer to Purchase – Procedure for Tendering Shares”, prior to 5:00 p.m. (Eastern time) on the Expiration Date. If your Shares are held through a broker, dealer, commercial bank, trust company or other nominee, you must request that your broker, dealer, commercial bank, trust company or other nominee effect the transaction for you. If you wish to tender Shares held through DRS, you are only required to complete the Letter of Transmittal and have it delivered to the Depositary, and you do not need to obtain and deliver share certificates for these holdings. You may also contact the Depositary or the Dealer Managers for assistance. See “Offer to Purchase – Procedure for Tendering Shares” and the instructions to the related Letter of Transmittal.
|
| Can I tender part of my Shares at different prices? |
Yes. You can elect to tender your Shares in separate lots at a different price and/or different type of tender for each lot. However, you cannot tender the same Shares at different prices. If you tender some Shares at one price and other Shares at another price, you must use a separate Letter of Transmittal for each tender. See “Offer to Purchase – Procedure for Tendering Shares”.
|
| What is the recent trading price of Shares? |
On July 25, 2023, the date prior to the announcement of the Corporation’s intention to proceed with a substantial issuer bid, the closing price on the TSX was $2.37 per Share and on Nasdaq was US$1.81 per Share. Shareholders are urged to obtain current market quotations for Shares. The weighted average trading price of the Shares for the ten trading days ending July 25, 2023 was $2.41 per Share on the TSX and US$1.81 per Share on Nasdaq. See “Issuer Bid Circular – Price Range and Trading Volume of Shares”.
|
| What will happen if I do not tender my Shares? |
Upon the completion of the Offer, the non-tendering Shareholders will realize a proportionate increase in their relative ownership interest in illumin, subject to illumin’s right to issue additional Shares and other equity securities in the future. The amount of illumin’s future cash assets will be reduced and/or its liabilities increased by the amount paid and expenses incurred in connection with the Offer. See “Issuer Bid Circular – Purpose and Effect of the Offer”.
|
| Once I have tendered Shares in the Offer, can I withdraw my tender? |
Yes. You may withdraw any Shares you have tendered (i) at any time prior to the Expiration Date, (ii) at any time if Shares have not been taken up by the Corporation before actual receipt by the Depositary of a notice of withdrawal in respect of such Shares, (iii) at any time after 40 business days from the commencement of the Offer if the Corporation has not yet accepted Shares for payment, (iv) if Shares have not been paid for by the Corporation within three business days of being taken up, and (v) as otherwise described in “Offer to Purchase – Withdrawal Rights”. See “Offer to Purchase – Withdrawal Rights”.
|
| How do I withdraw Shares I previously tendered? |
You must deliver, on a timely basis, a written or printed notice of your withdrawal to the Depositary at the address appearing on the back cover page of this document. A notice of withdrawal must specify your name, the number of Shares to be withdrawn and the name of the registered holder of the withdrawn Shares. Some additional requirements apply if the Share certificates to be withdrawn have been delivered to the Depositary or if your Shares have been tendered under the procedure for book-entry transfer. See “Offer to Purchase – Withdrawal Rights”.
|
| What is the accounting treatment to the Corporation of the Offer? |
The accounting treatment for the Corporation’s purchase of Shares in the Offer will result in a reduction in the Corporation’s share capital by an amount equal to the number of Shares purchased pursuant to the Offer multiplied by the average carrying amount of Shares, with any excess allocated to retained earnings. See “Issuer Bid Circular – Accounting Treatment of the Offer”.
|
| Can the Offer be withdrawn, extended or varied? |
Yes. Subject to applicable laws, we may extend or vary the Offer in our sole discretion prior to the Expiration Date. See “Offer to Purchase – Extension and Variation of the Offer”. We may also terminate the Offer under certain circumstances. See “Offer to Purchase – Conditions of the Offer”.
|
| How will I be notified if illumin extends the Offer? |
We will issue a news release by 9:00 a.m. (Eastern time) on the business day after the previously scheduled Expiration Date if we decide to extend the Offer. See “Offer to Purchase – Extension and Variation of the Offer”.
|
| Has illumin, its Board of Directors or the Dealer Managers adopted a position on the Offer? |
Our Board of Directors has approved the Offer. However, none of illumin, its Board of Directors, the Dealer Managers or the Depositary makes any recommendation to you or to any other Shareholders as to whether to tender or refrain from tendering Shares under the Offer, whether Shareholders should elect an Auction Tender or a Purchase Price Tender, or as to the purchase price or purchase prices at which you or any other Shareholders may tender Shares under the Offer. You must make your own decisions as to whether to tender Shares under the Offer, and, if so, how many Shares to tender and the price or prices at which to tender. Our directors and executive officers do not intend to tender Shares pursuant to the Offer. You should carefully consider all relevant factors with your own financial advisor, including the income tax consequences of tendering Shares under the Offer.
|
| Following the Offer, will illumin continue as a public corporation? |
Yes. The purchase of Shares through the Offer will not cause our remaining Shares to be delisted from Nasdaq or the TSX or cause us to be eligible for deregistration under the Exchange Act. However, separately, the Corporation has re-evaluated the continued benefits and costs of its listing on Nasdaq and has concluded that it is appropriate to delist from Nasdaq as soon as practical following the expiry of the Offer. The Corporation expects that its Shares will be eligible for quotation on the OTC Markets following such delisting. See “Issuer Bid Circular – Purpose and Effect of the Offer”.
|
| What impact will the Offer have on the liquidity of the market for Shares? |
We believe that, following completion of the Offer,
there will be a market for holders of Shares who do not tender their Shares to the Offer that is not materially less liquid than the market
that existed at the time of the making of the Offer. Our Board of Directors has obtained the Liquidity Opinion from Canaccord Genuity
to the effect that, based on and subject to the assumptions and limitations stated in the Liquidity Opinion, there is a liquid market
for Shares as of July 26, 2023 and that it is reasonable to conclude that, following the completion of the Offer in accordance with its
terms, there will be a market for holders of Shares who do not tender to the Offer that is not materially less liquid than the market
that existed at the time of the making of the Offer. A copy of the Liquidity Opinion is attached hereto as Schedule A.
See “Issuer Bid Circular – Purpose
and Effect of the Offer – Liquidity of Market”.
|
| When will illumin pay for Shares I tender? |
We will pay the Purchase Price (less applicable withholding taxes, if any) to Shareholders in cash, without interest, for Shares we purchase promptly after the expiration of the Offer. In the event of pro-ration, we do not expect to be able to commence payment for Shares until at least three business days after the Expiration Date. See “Offer to Purchase – Taking Up and Payment for Tendered Shares”.
|
| In what currency will illumin pay for Shares I tender? |
The Purchase Price and the amount payable to the tendering Shareholders (net of applicable withholding taxes, if any) will be denominated in Canadian dollars and illumin will pay for Shares you tender in Canadian dollars. See “Offer to Purchase – Taking Up and Payment for Tendered Shares”.
|
| Will I have to pay brokerage commissions if I tender my Shares? |
If you are a registered Shareholder and you tender your Shares directly to the Depositary, you will not incur any brokerage commissions. If you hold Shares through a broker, dealer, commercial bank, trust company or other nominee, we urge you to consult your broker, dealer, commercial bank, trust company or other nominee to determine whether transaction costs are applicable. See “Offer to Purchase – Taking Up and Payment for Tendered Shares”.
|
| How do holders of vested but unexercised Options participate in the Offer? |
The Offer is made only for Shares and not made for any Options. Any holder of Options who wishes to accept the Offer should, to the extent permitted by the terms thereof, duly exercise such Options in order to tender the resulting Shares in accordance with the terms and conditions of the Offer. Any such exercise must occur sufficiently in advance of the Expiration Date to assure holders of Options that they will have sufficient time to comply with the procedures for tendering Shares in the Offer. An exercise of an Option cannot be revoked even if Shares received upon exercise thereof and tendered in the Offer are not purchased in the Offer for any reason. Holders of such Options that exercise such Options and then tender Shares received on such exercise pursuant to the Offer could suffer adverse tax consequences. The tax consequences of such an exercise are not described under “Issuer Bid Circular – Income Tax Consequences”. Holders of Options are urged to seek tax advice from their own tax advisors in this regard.
|
| What are the income tax consequences if I tender my Shares? |
You should carefully consider the income tax consequences of tendering Shares under the Offer, as these consequences may be different than selling Shares through the facilities of the TSX or Nasdaq for a particular Shareholder. We also urge you to seek advice from your own tax advisors as to the specific tax consequences you may incur as a result of our purchase of your Shares under the Offer. See “Issuer Bid Circular – Income Tax Consequences”.
|
| Who can I talk to if I have questions? |
The Depositary or the Dealer Managers can help answer your questions. The Depositary is TSX Trust Company, and the Dealer Managers are Canaccord Genuity in Canada and Canaccord Genuity US in the United States. Contact information for the Depositary and the Dealer Managers is set forth on the back cover of this document.
|
| How do I get my Shares back if I have tendered them to the Offer but they are not purchased? |
All tendered Shares not purchased, including all Shares tendered pursuant to Auction Tenders at prices greater than the Purchase Price, Shares not purchased due to pro-ration and Shares not accepted for purchase, will be returned to the tendering Shareholder promptly after the Expiration Date or termination of the Offer without expense to the tendering Shareholder.
|
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE CORPORATION OR THE BOARD OF DIRECTORS AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR WHETHER SHAREHOLDERS SHOULD ELECT AN AUCTION TENDER OR A PURCHASE PRICE TENDER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN AS SET FORTH IN THIS OFFER. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION, THE BOARD OF DIRECTORS, THE DEALER MANAGERS OR THE DEPOSITARY.
|
OFFER
TO PURCHASE
To Shareholders of illumin Holdings Inc.:
The Corporation hereby offers to purchase for
cancellation Shares pursuant to (i) Auction Tenders in which the tendering Shareholders specify a price of not less than $2.53 per Share
and not more than $2.65 per Share in increments of $0.01 per Share, or (ii) Purchase Price Tenders, in either case on the terms and subject
to the conditions set forth in this Offer to Purchase, the Circular and the related Letter of Transmittal and the Notice of Guaranteed
Delivery.
The Offer commences on the date of this Offer
to Purchase and will expire at 5:00 p.m. (Eastern time) on August 30, 2023, unless withdrawn, extended or varied by illumin. Beneficial
owners should be aware that their broker, dealer, commercial bank, trust company or other nominee may establish its own earlier deadlines
for participation in the Offer. The Offer is not conditional upon the receipt of financing or any minimum number of Shares being tendered.
The Offer is, however, subject to other conditions and illumin reserves the right, subject to applicable laws, to withdraw the Offer and
not take up and pay for any Shares tendered under the Offer if certain events occur. See “Offer to Purchase – Conditions of
the Offer”.
Each Shareholder who has properly tendered Shares
pursuant to an Auction Tender at or below the Purchase Price or pursuant to a Purchase Price Tender, and who has not properly withdrawn
such Shares, will receive the Purchase Price, payable in cash (subject to applicable withholding taxes, if any), for all Shares purchased,
on the terms and subject to the conditions of the Offer, including the provisions relating to pro-ration described herein.
The Corporation will return all Shares not purchased
under the Offer, including Shares tendered pursuant to an Auction Tender at prices greater than the Purchase Price and Shares not purchased
because of pro-ration, promptly after the Expiration Date.
The Offer is made only for Shares and is not made
for any Options to acquire Shares. Any holder of Options who wishes to accept the Offer should, to the extent permitted by the terms thereof,
duly exercise such Options in order to tender the resulting Shares in accordance with the terms and conditions of the Offer. Any such
exercise must occur sufficiently in advance of the Expiration Date to assure holders of Options that they will have sufficient time to
comply with the procedures for tendering Shares in the Offer as described under “Offer to Purchase – Procedure for Tendering
Shares”. An exercise of an Option cannot be revoked even if Shares received upon exercise thereof and tendered in the Offer are
not purchased in the Offer for any reason. Holders of Options that exercise such Options and then tender Shares received on such exercise
pursuant to the Offer could suffer adverse tax consequences. The tax consequences of such an exercise are not described under “Issuer
Bid Circular – Income Tax Consequences”. Holders of Options are urged to seek tax advice from their own tax advisors in this
regard.
The Corporation’s Board of Directors has
approved the Offer. However, none of illumin, its Board of Directors, the Dealer Managers or the Depositary makes any recommendation to
any Shareholder as to whether to tender or refrain from tendering Shares under the Offer, whether Shareholders should elect an Auction
Tender or a Purchase Price Tender, or as to the purchase price or purchase prices at which Shareholders may tender Shares under the Offer.
Shareholders must make their own decisions as to whether to tender Shares under the Offer, and, if so, how many Shares to tender and the
price or prices at which to tender. None of the Corporation’s directors and executive officers intend to tender any of their Shares
pursuant to the Offer.
Shareholders should carefully consider all
relevant factors with their own financial advisors, including the income tax consequences of tendering Shares under the Offer. For some
Shareholders, the income tax treatment of tendering Shares to the Offer may be materially different from the income tax treatment of selling
Shares in the market. See “Issuer Bid Circular – Income Tax Consequences”.
The accompanying Circular, Letter of Transmittal
and Notice of Guaranteed Delivery contain important information and should be read carefully and in their entirety before making a decision
with respect to the Offer.
Promptly following the Expiration Date, the Corporation
will determine a single Purchase Price per Share, which will not be less than $2.53 per Share and not more than $2.65 per Share, that
is the lowest price that enables it to purchase the maximum number of Shares properly tendered and not withdrawn pursuant to the Offer
having an aggregate Purchase Price not exceeding $40,000,000. For the purpose of determining the Purchase Price, Shares tendered pursuant
to a Purchase Price Tender will be considered to have been tendered at $2.53 per Share (which is the minimum Purchase Price under the
Offer).
Upon determination of the Purchase Price, the
Corporation will publicly announce the Purchase Price for Shares, and upon the terms and subject to the conditions of the Offer (including
the pro-ration provisions described herein), all Shareholders who have properly tendered and not withdrawn their Shares either pursuant
to Auction Tenders at prices at or below the Purchase Price or pursuant to Purchase Price Tenders will receive the Purchase Price, payable
in cash (but subject to applicable withholding taxes, if any), for all Shares purchased. The Purchase Price will be denominated in Canadian
dollars and payments of amounts owing to a tendering Shareholder will be made in Canadian dollars. See “Offer to Purchase –
Taking Up and Payment for Tendered Shares”.
| 3. | Number of Shares and Pro-Ration |
The Corporation will purchase, upon the terms
and subject to the conditions of the Offer, at the Purchase Price, deposited Shares up to a maximum aggregate Purchase Price not exceeding
$40,000,000. Since the Purchase Price will only be determined after the Expiration Date, the number of Shares that will be purchased will
not be known until after the Expiration Date. If the Purchase Price is determined to be $2.53 per Share, the minimum Purchase Price pursuant
to the Offer, the maximum number of Shares that will be purchased pursuant to the Offer is 15,810,276. If the Purchase Price is determined
to be $2.65 per Share, the maximum Purchase Price pursuant to the Offer, the maximum number of Shares that will be purchased pursuant
to the Offer is 15,094,339.
As of July 25, 2023, there were 56,185,631 Shares
issued and outstanding and, accordingly, the Offer is for a maximum of approximately 28.14% of the total number of issued and outstanding
Shares if the Purchase Price is determined to be $2.53 (being the minimum Purchase Price under the Offer). If the Purchase Price is determined
to be $2.65 (which is the maximum Purchase Price under the Offer), the Offer is for a maximum of approximately 26.87% of the total number
of issued and outstanding Shares.
If the aggregate Purchase Price of the Successfully
Tendered Shares does not exceed $40,000,000, the Corporation will, upon the terms and subject to the conditions of the Offer, purchase
all Successfully Tendered Shares at the Purchase Price. If the aggregate Purchase Price of the Successfully Tendered Shares exceeds $40,000,000,
the Corporation will accept Shares for purchase first from all Successful Shareholders who are Odd Lot Holders (as defined below). With
respect to the Successful Shareholders who are not Odd Lot Holders, the Corporation will accept Shares for purchase at the Purchase Price
on a pro rata basis according to the number of Successfully Tendered Shares, less the number of Shares purchased from Odd Lot Holders
(with adjustments to avoid the purchase of fractional Shares).
For purposes of the Offer, the term “Odd
Lots” means all Successfully Tendered Shares tendered by or on behalf of the Successful Shareholders who individually beneficially
own, as of the close of business on the Expiration Date, an aggregate of fewer than 100 Shares (“Odd Lot Holders”).
As set forth above, Odd Lots will be accepted for purchase before any pro-ration. In order to qualify for this preference, an Odd Lot
Holder must properly tender, pursuant to an Auction Tender at a price at or below the Purchase Price or pursuant to a Purchase Price Tender,
all Shares beneficially owned by such Odd Lot Holder. Partial tenders will not qualify for this preference. Furthermore, partial tenders
will not qualify for this preference and this preference is not available to a Shareholder who holds separate certificates for fewer than
100 Shares or holds fewer than 100 Shares in different accounts if such Shareholder beneficially owns in the aggregate 100 or more Shares.
Any Odd Lot Holder wishing to tender all Shares beneficially owned, without pro-ration, must complete the appropriate box on the Letter
of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. Shareholders owning an aggregate of less than 100 Shares whose
Shares are purchased pursuant to the Offer not only will avoid the payment of brokerage commissions, but will also avoid any odd lot discounts,
each of which may be applicable on a sale of their Shares in a transaction on the TSX or Nasdaq.
| 4. | Announcement of Purchase Price, Number of Shares Validly Tendered and Aggregate Purchase Price |
The Corporation will publicly announce the Purchase
Price, the number of Shares validly tendered to the Offer and the aggregate Purchase Price promptly after the Expiration Date.
| 5. | Procedure for Tendering Shares |
| 5.1 | Proper Tender of Shares |
To tender Shares pursuant to the Offer, (i) the
certificates for all tendered Shares in proper form for transfer and/ or Shares held through DRS, together with a properly completed and
duly executed Letter of Transmittal (or a manually executed photocopy thereof) relating to such Shares with signatures that are guaranteed
if so required in accordance with the Letter of Transmittal, and any other documents required by the Letter of Transmittal, must be received
by the Depositary at one of the addresses listed in the Letter of Transmittal by the Expiration Date, (ii) the guaranteed delivery procedure
described below must be followed, or (iii) such Shares must be transferred pursuant to the procedures for book-entry transfer described
below (and a confirmation of such tender must be received by the Depositary, including either a Book-Entry Confirmation or an Agent’s
Message (each as defined below) if the tendering Shareholder has not delivered a Letter of Transmittal). If you wish to tender Shares
held through DRS, you are only required to complete the Letter of Transmittal and have it delivered to the Depositary, and you do not
need to obtain and deliver share certificates for these holdings. The term “Agent’s Message” means a message,
transmitted by the Depositary Trust Company (“DTC”) to and received by the Depositary and forming a part of a Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states
that such participant has received and agrees to be bound by the Letter of Transmittal and that the Corporation may enforce such Letter
of Transmittal against such participant. The term “Book-Entry Confirmation” means a confirmation of a book-entry transfer
of a Shareholder’s Shares into the Depositary’s account at CDS Clearing and Depositary Services Inc. (“CDS”).
In accordance with Instruction 5 in the Letter
of Transmittal or the Book-Entry Confirmation or Agent’s Message in lieu thereof, (i) each Shareholder desiring to tender Shares
pursuant to the Offer must indicate in the appropriate box on such Letter of Transmittal or the Book-Entry Confirmation or Agent’s
Message in lieu thereof, whether the Shareholder is tendering Shares pursuant to an Auction Tender or a Purchase Price Tender, and (ii)
each Shareholder desiring to tender Shares pursuant to an Auction Tender must further indicate, in the appropriate box in such Letter
of Transmittal or the Book-Entry Confirmation or Agent’s Message in lieu thereof, the price per Share (in increments of $0.01 per
Share) at which such Shares are being tendered. Under each of (i) and (ii) respectively, only one box may be checked. If a Shareholder
desires to tender Shares in separate lots at a different price and/or different type of tender for each lot, such Shareholder must complete
a separate Letter of Transmittal or Book-Entry Confirmation or Agent’s Message in lieu thereof (and, if applicable, a Notice of
Guaranteed Delivery) for each lot. The same Shares cannot be tendered (unless previously properly withdrawn) pursuant to both an Auction
Tender and a Purchase Price Tender, or pursuant to an Auction Tender at more than one price. Shareholders who tender Shares without making
a valid Auction Tender or Purchase Price Tender will be deemed to have made a Purchase Price Tender. In addition, Odd Lot Holders who
tender all their Shares must complete the appropriate box in the Letter of Transmittal in order to qualify for the preferential treatment
available to Odd Lot Holders as set forth in “Offer to Purchase – Number of Shares and Pro-Ration”.
No signature guarantee is required on the Letter
of Transmittal if either (i) the Letter of Transmittal is signed by the registered holder of Shares exactly as the name of the registered
holder appears on DRS or the share certificate tendered therewith, and payment and delivery are to be made directly to such registered
holder, or (ii) Shares are tendered for the account of a Canadian Schedule I chartered bank, a member of the Securities Transfer Agents
Medallion Program (STAMP), a member of the Stock Exchanges Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion
Signature Program (MSP) (each such entity, an “Eligible Institution”). Members of these programs are usually members
of a recognized stock exchange in Canada or the United States, members of the Investment Industry Regulatory Organization of Canada, members
of the Financial Industry Regulatory Authority or banks and trust companies in the United States. In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 7 in the Letter of Transmittal.
If a certificate or DRS representing Shares is
registered in the name of a person other than the signatory to a Letter of Transmittal, or if payment is to be made, or certificates or
DRS representing Shares not purchased or tendered are to be returned or issued to a person other than the registered holder, the certificate
or DRS must be endorsed or accompanied by an appropriate stock power, in either case, signed exactly as the name of the registered holder
appears on the certificate or DRS with the signature on the certificate or stock power signature guaranteed by an Eligible Institution.
An ownership declaration, which can be obtained from the Depositary, must also be completed and delivered to the Depositary.
A Shareholder who wishes to tender Shares under
the Offer and whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee should immediately
contact such nominee in order to take the necessary steps to be able to tender such Shares under the Offer. Participants of CDS and DTC
should contact the Depositary with respect to the tender of their Shares under the terms of the Offer.
| 5.3 | Book-Entry Transfer Procedures – CDS |
Any financial institution that is a participant
in CDS may make book-entry delivery of Shares through the CDS online tendering system pursuant to which book-entry transfers may be effected
(“CDSX”) by causing CDS to transfer such Shares to the Depositary in accordance with the applicable CDS procedures.
Delivery of Shares to the Depositary by means of a book-entry transfer through CDSX will constitute a valid tender under the Offer.
Shareholders may accept the Offer by following
the procedures for a book-entry transfer established by CDS, provided that a Book-Entry Confirmation through CDSX is received by the Depositary
at its office in Toronto, Ontario prior to the Expiration Date. Shareholders, through their respective CDS participants, who utilize CDSX
to accept the Offer via a book-entry transfer of their holdings with CDS, shall be deemed to have completed and submitted a Letter of
Transmittal and to be bound by the terms thereof and therefore such instructions received by the Depositary are considered to be a valid
tender in accordance with the terms of the Offer. Delivery of documents to CDS does not constitute delivery to the Depositary.
| 5.4 | Book-Entry Transfer Procedures – DTC |
Any financial institution that is a participant
in DTC may make book-entry delivery of Shares through DTC’s online tendering system pursuant to which book-entry transfers may be
effected (“ATOP”) by causing DTC to transfer such Shares into the Depositary’s account at DTC in accordance with
DTC’s procedures. Delivery of Shares to the Depositary by means of a book-entry transfer through ATOP will constitute a valid tender
under the Offer.
Shareholders may accept the Offer by following
the procedures for a book-entry transfer established by DTC, provided that an Agent’s Message through ATOP is received by the Depositary
at its office in Toronto, Ontario prior to the Expiration Date. Shareholders, through their respective DTC participants, who accept the
Offer via a book-entry transfer of their holdings into the Depositary’s account at DTC, shall be deemed to have completed and submitted
a Letter of Transmittal and to be bound by the terms thereof and therefore such instructions received by the Depositary are considered
to be a valid tender in accordance with the terms of the Offer. Delivery of documents to DTC does not constitute delivery to the Depositary.
The method of delivery of certificates representing
Shares and all other required documents is at the option and risk of the tendering Shareholder. If certificates representing Shares are
to be sent by mail, registered mail that is properly insured is recommended and it is suggested that the mailing be made sufficiently
in advance of the Expiration Date to permit delivery to the Depositary on or prior to such date. Delivery of a share certificate representing
Shares will only be made upon actual receipt of the share certificate representing such Shares by the Depositary.
| 5.6 | Lost or Stolen Certificates |
If any certificate representing Shares has been
lost or destroyed, the Shareholder should promptly notify the Depositary at the phone number or address set forth on the back cover page
of this document. The Shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). The
Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have
been followed, and in such circumstances, a longer period of time may be needed to complete a tender of Shares. Shareholders are urged
to contact the Depositary immediately in order to permit timely processing of this documentation.
If a Shareholder wishes to tender Shares pursuant
to the Offer and cannot deliver certificates for such Shares, or the book-entry transfer procedures described above cannot be completed,
prior to the Expiration Date, or time will not permit all required documents to reach the Depositary by the Expiration Date, such Shares
may nevertheless be tendered if all of the following conditions are met:
| (a) | such tender is made by or through an Eligible Institution; |
| (b) | a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Corporation through the Depositary, is received by the Depositary, at its office in Toronto, Ontario as set out in the Notice of
Guaranteed Delivery, by the Expiration Date; and |
| (c) | all tendered Shares (including original share certificates, if such Shares are held in certificated form)
in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually executed photocopy
thereof) or, in the case of a book-entry transfer, a Book-Entry Confirmation or Agent’s Message in lieu thereof relating to such
Shares, with signatures that are guaranteed if so required in accordance with the Letter of Transmittal, and any other documents required
by the Letter of Transmittal, are received by the Toronto office of the Depositary, before 5:00 p.m. (Eastern time) on or before the second
trading day on the TSX and Nasdaq after the Expiration Date. |
The Notice of Guaranteed Delivery may be hand
delivered, couriered, mailed or transmitted by facsimile transmission to the Toronto office of the Depositary listed in the Notice of
Guaranteed Delivery, and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates
for such Shares, or timely confirmation of the book-entry transfer of such Shares, (ii) a properly completed and duly executed Letter
of Transmittal (or a manually executed photocopy thereof) relating to such Shares, with signatures that are guaranteed if so required,
or a Book-Entry Confirmation or Agent’s Message in the case of a book-entry transfer, and (iii) any other documents required by
the Letter of Transmittal.
The tender information specified in a Notice of
Guaranteed Delivery by a person completing such Notice of Guaranteed Delivery will, in all circumstances, take precedence over the tender
information that is specified in the related Letter of Transmittal that is subsequently tendered.
| 5.8 | Return of Unpurchased Shares |
All tendered Shares not purchased, including all
Shares tendered pursuant to Auction Tenders at prices greater than the Purchase Price, Shares not purchased due to pro-ration and Shares
not accepted for purchase, will be returned to the tendering Shareholder promptly after the Expiration Date or termination of the Offer
without expense to the tendering Shareholder.
In the case of Shares tendered through book-entry
transfer into the Depositary’s account at DTC or CDS, Shares will be credited to the appropriate account maintained by the tendering
Shareholder at DTC or CDS, as applicable, without expense to the Shareholder.
| 5.9 | Determination of Validity, Rejection and Notice of Defect |
All questions as to the number of Shares to be
taken up, the price to be paid therefore, the form of documents and the validity, eligibility (including time of receipt) and acceptance
for payment of any tender of Shares will be determined by the Corporation, in its sole discretion, which determination will be final and
binding on all parties, except as otherwise finally determined by a court of competent jurisdiction or as required by law. The Corporation
reserves the absolute right to reject any tenders of Shares determined by it in its sole discretion not to be in proper form or completed
in accordance with the instructions set forth herein and in the Letter of Transmittal or the acceptance for payment of, or payment for,
which may, in the opinion of the Corporation’s counsel, be unlawful. The Corporation also reserves the absolute right to waive any
of the conditions of the Offer or any defect or irregularity in the tender of any particular Shares. Unless waived, any defects or irregularities
in connection with tenders must be cured within such time as the Corporation shall determine. No individual tender of Shares will be deemed
to be properly made until all defects and irregularities have been cured or waived. None of the Corporation, the Depositary, the Dealer
Managers or any other person will be obligated to give notice of defects or irregularities in tenders, nor shall any of them incur any
liability for failure to give any such notice. The Corporation’s interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the Notice of Guaranteed Delivery) will be final and binding, except as otherwise finally determined by
a court of competent jurisdiction or as required by law.
Under no circumstances will interest accrue or
be paid by the Corporation by reason of any delay in making payment to any person, including persons using the guaranteed delivery procedures,
and the payment for Shares tendered pursuant to the guaranteed delivery procedures will be the same as that for Shares delivered to the
Depositary on or prior to the Expiration Date, even if Shares to be delivered pursuant to the guaranteed delivery procedures are not so
delivered to the Depositary, and therefore payment by the Depositary on account of such Shares is not made, until after the date the payment
for the tendered Shares accepted for payment pursuant to the Offer is to be made by the Corporation.
| 5.10 | Formation of Agreement; Prohibition on “Short”
Tenders |
A proper tender of Shares pursuant to any one
of the procedures described above will constitute a binding agreement between the tendering Shareholder and the Corporation, effective
as of the Expiration Date, upon the terms and subject to the conditions of the Offer. Such agreement will be governed by and construed
in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
In addition, a tender of Shares to illumin pursuant
to any procedures described herein will constitute a representation by such Shareholder that (i) such Shareholder has a “net long
position” in Shares being tendered or equivalent securities at least equal to Shares tendered within the meaning of Rule 14e-4 of
the Exchange Act and (ii) the tender of such Shares complies with Rule 14e-4. It is a violation of Section 14(e) of the Exchange Act and
of Rule 14e-4 promulgated thereunder for a person, directly or indirectly, to tender Shares for that person’s own account unless,
at the time of tender and at the end of the pro-ration period or period during which Shares are accepted by lot (including any extensions
thereof), the person so tendering has a net long position equal to or greater than (A) the amount of Shares tendered or (B) other securities
immediately convertible into, or exchangeable or exercisable for, the amount of Shares tendered and upon acceptance of such person’s
tender, will acquire such Shares for tender by conversion, exchange or exercise of such other securities and will deliver or cause to
be delivered
Shares in accordance with the terms of the Offer.
Section 14(e) and Rule 14e-4 provide a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.
Except as otherwise provided in this Section,
tenders of Shares pursuant to the Offer will be irrevocable. Shares tendered pursuant to the Offer may be withdrawn by the Shareholder
in any of the following circumstances:
| (a) | at any time prior to the Expiration Date; |
| (b) | at any time if Shares have not been taken up by the Corporation before actual receipt by the Depositary
of a notice of withdrawal in respect of such Shares; |
| (c) | if Shares have not been paid for by the Corporation within three business days of being taken up; and/or |
| (d) | as required by Section 2.30(2) of National Instrument 62-104 – Take-Over Bids and Issuer Bids and
without limiting the withdrawal rights set out in clauses (a) through (d), at any time before the expiration of 10 days from the date
that a notice of change or notice of variation has been given in accordance with this Offer to Purchase (other than a variation that (i)
consists solely of an increase in the consideration offered for Shares under the Offer where the time for deposit is not extended for
greater than 10 days, or (ii) consists solely of the waiver of a condition of the Offer), unless Shares tendered pursuant to the Offer
have been taken up by the Corporation before the date of the notice of change or variation. See “Offer to Purchase – Extension
and Variation of the Offer”. In addition, pursuant to Rule 13e-4(f) under the Exchange Act, Shares may also be withdrawn after September
22, 2023, which is the 40th business day after the date of the commencement of the Offer, unless such Shares have already been
accepted for payment by the Corporation pursuant to the Offer and not validly withdrawn. |
For a withdrawal to be effective, a written or
printed copy of a notice of withdrawal must be actually received by the Depositary by the applicable date specified above at the place
of tender of the relevant Shares. Any such notice of withdrawal must (i) be signed by or on behalf of the person who signed the Letter
of Transmittal that accompanied Shares being withdrawn or, in the case of Shares tendered by a CDS or DTC participant, be signed by such
participant in the same manner as the participant’s name is listed on the applicable Book-Entry Confirmation or Agent’s Message,
or be accompanied by evidence sufficient to the Depositary that the person withdrawing the tender has succeeded to the beneficial ownership
of Shares, and (ii) specify the name of the person who tendered Shares to be withdrawn, the name of the registered holder, if different
from that of the person who tendered such Shares, and the number of Shares to be withdrawn. If the certificates for Shares tendered pursuant
to the Offer have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering
Shareholder must submit the serial numbers shown on the particular certificates evidencing Shares to be withdrawn and the signature on
the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Shares tendered by an Eligible Institution.
A withdrawal of Shares tendered pursuant to the Offer can only be accomplished in accordance with the foregoing procedures. The withdrawal
shall take effect only upon actual receipt by the Depositary of a properly completed and executed notice of withdrawal in writing.
A Shareholder who wishes to withdraw Shares
under the Offer and who holds Shares through a broker, dealer, commercial bank, trust company or other nominee should immediately contact
such broker, dealer, commercial bank, trust company or other nominee in order to take the necessary steps to be able to withdraw such
Shares under the Offer. Participants of CDS and DTC should contact such Depositary with respect to the withdrawal of Shares under the
Offer.
All questions as to the form and validity (including
time of receipt) of notices of withdrawal will be determined by the Corporation, in its sole discretion, which determination shall be
final and binding, except as otherwise finally determined by a court of competent jurisdiction or as required by law. None of the Corporation,
the Depositary, the Dealer Managers nor any other person will be obligated to give notice of defects or irregularities in notices of withdrawal,
nor shall any of them incur any liability for failure to give any such notice.
Any Shares properly withdrawn will thereafter
be deemed not tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered prior to the Expiration Date by again following
the procedures described herein.
If illumin extends the period of time during which
the Offer is open, is delayed in its purchase of Shares or is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to illumin’s rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of illumin all tendered
Shares. In the event of such retention, such Shares may not be withdrawn except to the extent the tendering Shareholders are entitled
to withdrawal rights as described under this Section.
| 7. | Conditions of the Offer |
The Offer is not conditional on the receipt of
financing or any minimum number of Shares being tendered. Notwithstanding any other provision of the Offer, illumin shall not be required
to accept for purchase, to purchase or to pay for any Shares tendered, and may withdraw, extend or vary the Offer or may postpone the
acceptance for payment of or the payment for Shares tendered (subject to Exchange Act Rule 13e-4(f)(5), which requires that illumin must
return Shares tendered promptly after termination or withdrawal of the Offer), if, at any time before the Expiration Date, any of the
following events shall have occurred (or shall have been determined by illumin to have occurred) which, in the Corporation’s sole
judgment, acting reasonably, in any such case and regardless of the circumstances giving rise to the event or events, makes it inadvisable
to proceed with the Offer or with such acceptance for purchase or payment:
| (a) | there shall have been threatened, taken or pending any action, suit or proceeding by any government or
governmental authority or regulatory or administrative agency in any jurisdiction, or by any other person in any jurisdiction, before
any court or governmental authority or regulatory or administrative agency in any jurisdiction (i) challenging or seeking to cease trade,
make illegal, delay or otherwise directly or indirectly restrain or prohibit the making of the Offer, the acceptance for payment of some
or all Shares by the Corporation or otherwise directly or indirectly relating in any manner to or affecting the Offer, or (ii) that otherwise,
in the sole judgment of the Corporation, acting reasonably, has or may have a material adverse effect on Shares, business, income, assets,
liabilities, condition (financial or otherwise), properties, operations, results of operations or prospects of the Corporation and its
subsidiaries taken as a whole or has impaired or may materially impair the contemplated benefits of the Offer to the Corporation; |
| (b) | there shall have been any action or proceeding threatened, pending or taken or approval withheld or any
statute, rule, regulation, stay, decree, judgment or order or injunction proposed, sought, enacted, enforced, promulgated, amended, issued
or deemed applicable to the Offer or the Corporation or any of its subsidiaries by or before any court, government or governmental authority
or regulatory or administrative agency in any jurisdiction that, in the sole judgment of the Corporation, acting reasonably, might directly
or indirectly result in any of the consequences referred to in clauses (i) or (ii) of paragraph (a) above or would or might prohibit,
prevent, restrict or delay consummation of the Offer or materially impair the contemplated benefits to us of the Offer; |
| (c) | there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities
on any securities exchange or in the over-the-counter market in Canada or the United States, (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in Canada or the United States (whether or not mandatory), (iii) a natural disaster
or the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving Canada, the
United States or any other region where the Corporation maintains significant business activities, (iv) any limitation by any government
or governmental authority or regulatory or administrative agency or any other event that, in the sole judgment of the Corporation, acting
reasonably, might affect the extension of credit by banks or other lending institutions, (v) any material change in short term or long
term interest rates, (vi) any change in the general political, market, economic or financial conditions (including, without limitation,
any change in commodity prices) that, in our sole judgment, acting reasonably, has or may have a material adverse effect on the Corporation’s
business, operations or prospects or the trading in, or value of, Shares, (vii) any decline in any of the S&P/TSX Composite Index,
the Nasdaq Composite Index, the Dow Jones Industrial Average or the S&P 500 Index by an amount in excess of 10%, measured from the
close of business on July 25, 2023, or (viii) in the case of any of the foregoing existing at the time of the commencement of the Offer,
an acceleration or worsening thereof; |
| (d) | there shall have occurred a material change in U.S. or any other currency exchange rates or a suspension
or limitation on the markets for such currencies that could have, in the Corporation’s reasonable judgment, a material adverse effect
on the business, properties, assets, liabilities, capitalization, shareholders’ equity, financial condition (or otherwise), operations,
results of operations or prospects of the Corporation and its subsidiaries, taken as a whole, or on the trading in Shares; |
| (e) | there shall have occurred any change or changes (or any development involving any prospective change or
changes) in the business, earnings, assets, liabilities, properties, condition (financial or otherwise), operations, results of operations
or prospects of the Corporation or any of its subsidiaries that, in the sole judgment of the Corporation, acting reasonably, has, have
or may have, individually or in the aggregate, a material adverse effect with respect to the Corporation and its subsidiaries; |
| (f) | any take-over bid or tender or exchange offer with respect to some or all of the securities of the Corporation,
or any merger, plan of arrangement, business combination or acquisition proposal, disposition of assets, or other similar transaction
with or involving the Corporation and its subsidiaries, other than the Offer, or any solicitation of proxies, other than by management,
to seek to control or influence the Board of Directors, shall have been proposed, announced or made by any individual or entity; |
| (g) | Canaccord Genuity has withdrawn or amended the Liquidity Opinion with respect to the liquidity of Shares; |
| (h) | there shall have occurred a decrease in excess of 10% of the market price of Shares on the TSX or Nasdaq
since the close of business on July 25, 2023; |
| (i) | the Corporation shall have concluded, in its sole judgment, acting reasonably, that the Offer or the taking
up and payment for any or all Shares by the Corporation is illegal or not in compliance with applicable law and, if required under any
such legislation, the Corporation shall not have received the necessary exemptions from or approvals or waivers of the appropriate courts
or applicable securities regulatory authorities in respect of the Offer, or such exemptions or waivers are rescinded or modified in a
manner that is not in form and substance satisfactory to the Corporation; |
| (j) | any approval, permit, authorization, favorable review or consent or waiver of or filing with any domestic
or foreign governmental entity or other authority or any third party consent, required to be obtained or made in connection with the Offer,
shall not have been obtained or made on terms and conditions satisfactory to us in our reasonable judgment; |
| (k) | any change shall have occurred or been proposed to the Income Tax Act (Canada) and the regulations
thereunder (collectively, the “Tax Act”) or to the current published administrative policies and assessing practices
of the Canada Revenue Agency (the “CRA”), that, in the sole judgment of the Corporation, is detrimental to the Corporation
or its affiliates taken as a whole or to a Shareholder, or with respect to making the Offer or taking up and paying for Shares deposited
under the Offer; |
| (l) | the Corporation shall have determined, in its sole judgment, acting reasonably, that the completion of
the Offer subjects the Corporation to any material tax liability, other than a liability to withhold and remit taxes in respect of amounts
paid under the Offer, or subjects the Corporation to Part VI.1 tax under the Tax Act; |
| (m) | any change shall have occurred or been proposed to the United States Internal Revenue Code of 1986,
as amended (the “Code”), the Treasury regulations promulgated thereunder, or publicly available administrative policies
of the U.S. Internal Revenue Service (the “IRS”), or the equivalent laws, regulations and policies of another jurisdiction
where one or more Shareholders are resident, that, in the sole judgment of the Corporation, is detrimental to the Corporation or its affiliates
taken as a whole or to a Shareholder, or with respect to making the Offer or taking up and paying for Shares deposited under the Offer; |
| (n) | the Corporation shall have concluded that the purchase of Shares pursuant to the Offer will constitute
a “Rule 13e-3 transaction”, as such term is defined in Rule 13e-3 under the Exchange Act; |
| (o) | any entity, “group” (as that term is used in Section 13(d)(3) of the Exchange Act) or person
(other than entities, groups or persons who have filed with the SEC on or before July 25, 2023 a Schedule 13G with respect to any Shares)
shall have acquired or proposed to acquire, beneficial ownership of more than 5% of the outstanding Shares; |
| (p) | any entity, group, or person who has filed with the SEC on or before July 25, 2023 a Schedule 13G with
respect to any Shares shall have acquired or proposed to acquire, whether through the acquisition of stock, the formation of a group,
the grant of any option or right, or otherwise (other than by virtue of the Offer), beneficial ownership of additional Shares constituting
2% or more of the outstanding Shares; |
| (q) | any entity, person or group shall have filed on or after July 25, 2023 a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended reflecting an intent to acquire us or any Shares, or
has made a public announcement reflecting an intent to acquire the Corporation or any of our subsidiaries or any of our or their respective
assets or securities; or |
| (r) | the Corporation reasonably determines that the completion of the Offer and the purchase of Shares may
cause Shares to be delisted from the TSX. |
The foregoing conditions are for the sole benefit
of the Corporation and may be asserted by the Corporation, in its sole judgment, acting reasonably, regardless of the circumstances giving
rise to any such conditions, or may be waived by the Corporation, in its sole judgment, acting reasonably, in whole or in part at any
time prior to the Expiration Date, provided that any condition waived in whole or in part will be waived with respect to all Shares tendered.
The waiver of any such right with respect to particular facts and other circumstances shall not be deemed a waiver with respect to any
other facts and circumstances. Any determination by the Corporation concerning the events described in this Section shall be final and
binding on all parties, except as otherwise finally determined by a court of competent jurisdiction or as required by law.
Any waiver of a condition or the withdrawal of
the Offer by the Corporation shall be deemed to be effective on the date on which notice of such waiver or withdrawal by the Corporation
is delivered or otherwise communicated to the Depositary. The Corporation, after giving notice to the Depositary of any waiver of a condition
or the withdrawal of the Offer, shall immediately make a public announcement of such waiver or withdrawal and, as applicable, provide
or cause to be provided notice of such waiver or withdrawal to the TSX, Nasdaq and the applicable securities regulatory authorities. If
the Offer is withdrawn, the Corporation shall not be obligated to take up, accept for purchase or pay for any Shares tendered under the
Offer, and the Depositary will return all tendered Shares, Letters of Transmittal and Notices of Guaranteed Delivery and any related documents
to the parties by whom they were deposited.
| 8. | Extension and Variation of the Offer |
Subject to applicable law, the Corporation expressly
reserves the right, in its sole discretion, at any time or from time to time prior to the Expiration Date to the extent permitted under
applicable securities legislation, to extend the period of time during which the Offer is open or to vary the terms and conditions of
the Offer by giving written notice, or oral notice to be confirmed in writing, of extension or variation to the Depositary and by causing
the Depositary to provide to all Shareholders, where required by law, as soon as practicable thereafter, a copy of the notice in the manner
set forth under “Offer to Purchase – Notice”. Promptly after giving notice of an extension or variation to the Depositary,
the Corporation will make a public announcement of the extension or variation (such announcement, in the case of an extension, to be issued
no later than 9:00 a.m. (Eastern time), on the next business day after the last previously scheduled or announced Expiration Date) and,
as applicable, provide or cause to be provided notice of such extension or variation to the TSX, Nasdaq and the applicable securities
regulatory authorities, including the SEC. Any notice of extension or variation will be deemed to have been given and be effective on
the day on which it is delivered or otherwise communicated, by facsimile or electronic mail, to the Depositary at its principal office
in Toronto, Ontario.
Where the terms of the Offer are varied (other
than a variation consisting solely of the waiver of a condition of the Offer), the period during which Shares may be deposited pursuant
to the Offer will not expire before 10 days (except for any variation increasing or decreasing the aggregate Purchase Price or the range
of prices we may pay for Shares pursuant to the Offer, and thereby increasing or decreasing the number of Shares purchasable in the Offer,
or fees payable to the Dealer Managers of the Offer or any soliciting dealer, in which case the Offer will not expire before 10 business
days from the date such variation is published) after the date of the notice of variation, unless otherwise permitted by applicable law.
In the event of any variation, all Shares previously deposited and not taken up or withdrawn will remain subject to the Offer and may
be accepted for purchase by us in accordance with the terms of the Offer, subject to applicable withdrawal rights as specified in “Offer
to Purchase – Withdrawal Rights”. An extension of the Expiration Date or a variation of the Offer does not constitute a waiver
by the Corporation of its rights set forth in “Offer to Purchase – Conditions of the Offer”.
If the Corporation makes a material change in
the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer, we will disseminate additional
tender offer materials and extend the Offer if and to the extent required by applicable Canadian securities laws, the rules of the SEC
under the Exchange Act and the interpretations thereunder. Pursuant to applicable United States securities laws, the minimum period during
which an offer must remain open following material changes in the terms of an offer or information concerning an offer, other than a change
in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality
of the terms or information changes and the appropriate manner of dissemination. In a published release, the SEC has stated that, in its
view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given
to security holders, and that if material changes are made with respect to information that approaches the significance of price and the
percentage of securities sought, a minimum period of 10 business days may be required to allow for adequate dissemination to security
holders and investor response.
The Corporation expressly reserves the right,
in its sole discretion (i) to terminate the Offer and not take up and pay for any Shares not theretofore taken up and paid for upon the
occurrence of any of the events specified under “Offer to Purchase – Conditions of the Offer”, and (ii) at any time
or from time to time prior to the Expiration Date, to amend the Offer in any respect, including increasing or decreasing the number of
Shares the Corporation may purchase or the range of prices it may pay pursuant to the Offer, subject to compliance with applicable securities
legislation.
Any such extension, delay, termination or amendment
will be followed as promptly as practicable by a public announcement. Without limiting the manner in which the Corporation may choose
to make any public announcement, except as provided by applicable law, the Corporation shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by making a release through its usual news wire service.
The Corporation will not provide for any subsequent
offering period following the Expiration Date.
| 9. | Taking Up and Payment for Tendered Shares |
The Corporation will comply with both Canadian
and U.S. regulations governing the timing for acceptance of and payment for Shares. Under Canadian regulations, upon the terms and provisions
of the Offer (including pro-ration) and subject to and in accordance with applicable Canadian and United States securities laws, the Corporation
is required to take up and pay for Shares properly tendered and not withdrawn under the Offer in accordance with the terms thereof promptly
after the Expiration Date, but in any event no later than the latest date required by applicable law, provided that the conditions of
the Offer (as the same may be amended) have been satisfied or waived. The Corporation will acquire Shares to be purchased pursuant to
the Offer and title thereto under this Offer to Purchase upon having taken up such Shares even if payment therefore shall have not been
effected. The Corporation will pay for such Shares within three business days after taking up Shares. Pursuant to Rule 14e-1(c) under
the Exchange Act, the Corporation is required to promptly accept for payment and promptly thereafter pay for all Shares validly tendered
and not properly withdrawn prior to the Expiration Date pursuant to the Offer.
For the purposes of the Offer, the Corporation
will be deemed to have taken up and paid for the Successfully Tendered Shares having an aggregate Purchase Price not exceeding $40,000,000
if, as and when the Corporation gives oral notice (to be confirmed in writing) or written notice or other communication confirmed in writing
to the Depositary to that effect.
The Corporation reserves the right, in its sole
discretion, to delay taking up or paying for any Shares or to terminate the Offer and not take up or pay for any Shares if any event specified
under “Offer to Purchase – Conditions of the Offer” is not satisfied or waived, by giving written notice thereof or
other communication confirmed in writing to the Depositary. The Corporation also reserves the right, in its sole discretion and notwithstanding
any other condition of the Offer, to delay taking up and paying for Shares to the extent required to comply with any applicable law.
In the event of pro-ration of Shares tendered
pursuant to the Offer, the Corporation will determine the pro-ration factor and pay for those tendered Shares accepted for payment promptly
after the Expiration Date. However, the Corporation does not expect to be able to announce the final results of any such pro-ration until
approximately three business days after the Expiration Date.
All tendered Shares not purchased, including all
Shares tendered pursuant to Auction Tenders at prices greater than the Purchase Price, Shares not purchased due to pro-ration and Shares
not accepted for purchase, will be returned to the tendering Shareholder promptly after the Expiration Date or termination of the Offer
without expense to the tendering Shareholder.
The Corporation will pay for Shares taken up under
the Offer by providing the Depositary with sufficient funds (by bank transfer or other means satisfactory to the Depositary) for transmittal
to the tendering Shareholders. Under no circumstances will interest accrue or be paid by the Corporation or the Depositary on the Purchase
Price of Shares purchased by the Corporation, regardless of any delay in making such payment or otherwise.
The tendering Shareholders will not be obligated
to pay brokerage fees or commissions to the Corporation, the Dealer Managers or the Depositary. However, Shareholders are cautioned to
consult with their own brokers or other intermediaries to determine whether any fees or commissions are payable to their brokers or other
intermediaries in connection with a tender of Shares pursuant to the Offer. The Corporation will pay all fees and expenses of the Dealer
Managers (in their capacity as such) and the Depositary in connection with the Offer.
The Depositary will act as agent of persons who
have properly tendered Shares in acceptance of the Offer and have not withdrawn them, for the purposes of receiving payment from the Corporation
and transmitting payment to such persons. Receipt by the Depositary from the Corporation of payment for such Shares will be deemed to
constitute receipt of payment by persons tendering Shares.
The settlement with each Shareholder who has tendered
Shares under the Offer will be effected by the Depositary by forwarding a cheque, payable in U.S. funds, representing the cash payment
(less applicable withholding taxes, if any) for such Shareholder’s Shares taken up under the Offer. The cheque will be issued in
the name of the person signing the Letter of Transmittal or in the name of such other person as specified by the person signing the Letter
of Transmittal by properly completing the appropriate box in such Letter of Transmittal. Unless the tendering Shareholder instructs the
Depositary to hold the cheque for pick-up by checking the appropriate box in the Letter of Transmittal, the cheque will be forwarded by
prepaid mail to the payee at the address specified in the Letter of Transmittal. If no such delivery instructions are specified, the cheque
will be sent to the address of the tendering Shareholder as it appears in the registers maintained in respect of Shares. Cheques mailed
in accordance with this paragraph will be deemed to have been delivered at the time of mailing. Payments will be made net of any applicable
withholding taxes.
All Shares purchased by the Corporation pursuant
to the Offer will be cancelled.
| 10. | Payment in the Event of Mail Service Interruption |
Notwithstanding the provisions of the Offer, cheques
in payment for Shares purchased under the Offer and certificates for any Shares to be returned will not be mailed if the Corporation determines
that delivery by mail may be delayed. Persons entitled to cheques or certificates that are not mailed for this reason may take delivery
at the office of the Depositary at which the tendered certificates for Shares were delivered until the Corporation has determined that
delivery by mail will no longer be delayed. The Corporation will provide notice, in accordance with this Offer to Purchase, of any determination
under this section not to mail as soon as reasonably practicable after such determination is made.
Shares acquired pursuant to the Offer shall be
acquired by the Corporation free and clear of all hypothecs, liens, charges, encumbrances, security interests, claims, restrictions and
equities whatsoever, together with all rights and benefits arising therefrom, provided that any dividends or distributions that may be
paid, issued, distributed, made or transferred on or in respect of such Shares to Shareholders of record on or prior to the date upon
which Shares are taken up and paid for under the Offer shall be for the account of such Shareholders. Each Shareholder of record on that
date will be entitled to receive that dividend or distribution, whether or not such Shareholder tenders Shares pursuant to the Offer.
Each tendering Shareholder will represent and
warrant that such Shareholder has full power and authority to deposit, sell, assign and transfer the deposited Shares and any and all
dividends, distributions, payments, securities, rights, assets or other interests which may be declared, paid, issued, distributed, made
or transferred on or in respect of the deposited Shares with a record date on or after the date that illumin takes up and accepts for
purchase the deposited Shares and that, if the deposited Shares are taken up and accepted for purchase by illumin, illumin will acquire
good title thereto, free and clear of all liens, charges, encumbrances, security interests, claims, restrictions and equities whatsoever,
together with all rights and benefits arising therefrom.
Without limiting any other lawful means of giving
notice, any notice to be given by the Corporation or the Depositary under the Offer will be deemed to have been properly given if it is
broadly disseminated by news release or mailed by first-class mail, postage prepaid, to the registered holders of Shares at their respective
addresses as shown on the share registers maintained in respect of Shares and will be deemed to have been received following the issuance
of such news release or on the first business day following the date of mailing, as applicable. These provisions apply despite (i) any
accidental omission to give notice to any one or more Shareholders, and (ii) an interruption of mail service in Canada or the United States
following mailing. In the event of an interruption of mail service following mailing, the Corporation will use reasonable efforts to disseminate
the notice by other means, such as publication. If any notice is to be given by mail and post offices in Canada or the United States are
not open for deposit of mail, or there is reason to believe there is or could be a disruption in all or any part of the postal service,
any notice which the Corporation or the Depositary may give or cause to be given under the Offer will be deemed to have been properly
given and to have been received by Shareholders if it is issued by way of a news release and if it is published once in the New York
Times, The Globe and Mail or the National Post and in La Presse.
| (a) | No broker, dealer or other person has been authorized to give any information or to make any representation
on behalf of the Corporation, the Board of Directors, the Dealer Managers or the Depositary other than as contained in the Offer, and,
if any such information or representation is given or made, it must not be relied upon as having been authorized by the Corporation, the
Board of Directors, the Dealer Managers or the Depositary. |
| (b) | The Offer and all contracts resulting from the acceptance thereof shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. |
| (c) | The Corporation, in its sole discretion, shall be entitled to make a final and binding determination of
all questions relating to the interpretation of the Offer, the validity of any acceptance of the Offer and the validity of any withdrawals
of Shares, except as otherwise finally determined in a subsequent judicial proceeding or as required by law. |
| (d) | The Offer is not being made to Shareholders residing in any jurisdiction in which the making of the Offer
would not be in compliance with the laws of such jurisdiction. The Corporation may, in its sole discretion, take such action as it may
deem necessary to extend the Offer to Shareholders in any such jurisdiction in accordance with applicable laws. |
| (e) | It is a term of the Offer that, for the purposes of subsection 191(4) of the Tax Act, the “specified
amount” in respect of each Share will be an amount equal to the closing trading price for Shares on Nasdaq on the Expiration Date,
as converted into Canadian dollars using the Cdn$/US$ Bank of Canada daily average exchange rate on the Expiration Date. We will publicly
announce the specified amount when we announce the Purchase Price pursuant to the Offer. |
Neither illumin nor its Board of Directors,
in making the decision to present the Offer to Shareholders, makes any recommendation to any Shareholder as to whether to tender or refrain
from tendering Shares. We urge Shareholders to consult their own financial, legal, investment and tax advisors and make their own decision
whether to deposit Shares to the Offer and, if so, how many Shares to deposit, and at what price or prices.
The accompanying Circular, together with this
Offer to Purchase, constitutes the issuer bid circular required under Canadian securities legislation with respect to the Offer. The accompanying
Circular contains additional information relating to the Offer.
Pursuant to Rule 13e-4(c)(2) under the Exchange
Act, illumin has filed with the SEC a Schedule TO which contains additional information with respect to the Offer. The Offer, which constitutes
a part of the Schedule TO, does not contain all of the information set forth in the Schedule TO. The Schedule TO, including any amendments
and supplements thereto, may be examined, and copies may be obtained at the same places and in the same manner as is set forth under “Offer
to Purchase – Additional Information” with respect to information concerning illumin. The Offer is not being made to Shareholders
in any jurisdiction in which the making or acceptance of offers to sell Shares would not be in compliance with the laws of that jurisdiction.
If the Corporation becomes aware of any U.S. state or other jurisdiction where the making of the Offer or the acceptance of Shares pursuant
to the Offer is not in compliance with applicable law, the Corporation will make a good faith effort to comply with the applicable law.
If, after such good faith effort, the Corporation cannot comply with the applicable law, the Offer will not be made to Shareholders residing
in such U.S. state or jurisdiction. In any U.S. state or other jurisdiction where the securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made on our behalf by one or more registered brokers or by
dealers licensed under the laws of that jurisdiction.
DATED this 27 day
of July, 2023.
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ILLUMIN HOLDINGS INC. |
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By: |
(signed) “Tal Hayek” |
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Name: Tal Hayek |
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Title: Chief Executive Officer |
ISSUER
BID CIRCULAR
This Circular is being furnished in connection
with the Offer by illumin to purchase for not more than $40,000,000 up to 15,810,276 of its Shares at a Purchase Price of not less than
$2.53 per Share and not more than $2.65 per Share. Terms defined in the Offer to Purchase and not otherwise defined herein have the same
meaning in this Circular. The terms and conditions of the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
are incorporated into and form part of this Circular. Reference is made to the Offer to Purchase for details of the terms and conditions
of the Offer.
The Corporation is a technology company that enables
marketers to connect intelligently with audiences across video, mobile, social and online advertising campaigns. The Corporation’s
Programmatic Marketing Platform, powered by proprietary machine learning technology, is at the core of its business, accompanied by proprietary
solutions for analytics-led video and mobile targeting that leverages data. The Corporation empowers marketers by offering near real-time
reporting and analytics, bringing accountability to programmatic advertising to deliver business results and help solve the key challenges
that digital advertisers face. The Corporation is headquartered in Toronto and has offices in Canada, the U.S., Spain, France, Brazil,
Chile, Mexico, Colombia and Argentina. Its key customers include both agencies and brands, including large Fortune 500 enterprises and
small to mid-sized businesses.
The Corporation was incorporated under the Canadian
Business Corporations Act. Its executive office is located at 70 University Avenue, Suite 1200, Toronto, Ontario M5J 2M4.
For additional information regarding illumin,
see “Offer to Purchase – Additional Information”.
The Corporation is authorized to issue an unlimited
number of Shares and preferred shares, each issuable in series. As at July 25, 2023, 56,185,631 Shares were outstanding and no preferred
shares were outstanding.
| 3. | Purpose and Effect of the Offer |
We continuously consider ways to enhance Shareholder
value. Following a thoughtful review of the capital required for our operational and strategic investment needs, we have determined that
the Corporation has excess cash that is available to return to Shareholders. We believe that the purchase of Shares under the Offer represents
an attractive investment by the Corporation and an equitable and efficient means to distribute an aggregate of up to $40,000,000 to Shareholders
who elect to tender, while at the same time proportionately increasing the equity interest in the Corporation of Shareholders who do not
elect to tender, and that the Offer is in the best interests of the Corporation and its Shareholders.
The Corporation believes its Shares are undervalued
and that the Offer is an advisable use of the Corporation’s financial resources given its available cash resources and its ongoing
cash requirements. In addition, as the purchase of Shares pursuant to the Offer will reduce the number of outstanding Shares, the Offer,
if completed, will be accretive to any future earnings per Share that the Corporation may record, although there can be no assurance of
such earnings. Shares acquired by the Corporation pursuant to the Offer will be cancelled.
The Corporation has re-evaluated the continued
benefits and costs of its listing on Nasdaq and has concluded that it is appropriate to delist from Nasdaq as soon as practical following
the expiry of the Offer. While this decision to delist from Nasdaq is not conditional on the making or the success of the Offer, the Offer
provides U.S. Shareholders with an opportunity for liquidity at a premium well in advance of such delisting from Nasdaq. The Corporation
expects that its Shares will be eligible for quotation on the OTC Markets following such delisting.
After giving effect to the Offer, illumin believes
that it will continue to have sufficient financial resources and working capital to conduct its ongoing business and operations and the
Offer is not expected to preclude the Corporation from pursuing its foreseeable business opportunities or the future growth of the Corporation’s
business.
| 3.1 | Background to the Offer |
Management of the Corporation believes that the
recent trading price range of Shares is below their intrinsic value and that repurchasing a portion of Shares would be an efficient use
of the Corporation’s resources. The Corporation’s management engaged Canaccord Genuity to provide the Liquidity Opinion and
financial advice in connection with the Offer. There were no discussions with significant shareholders that were not members of management
or of the Board of Directors prior to the announcement of the Offer.
Given that the trading price range of Shares continued
to be below what the Corporation believes is their intrinsic value, management of the Corporation proposed the Offer to the Board of Directors
for the Board of Directors to consider whether to proceed.
After consulting with Canaccord
Genuity, management provided its recommendation to the Board of Directors that the Corporation proceed with the Offer, including with
respect to the Canadian dollar denomination of the Offer, the “Dutch auction” structure of the Offer, the ranges for the minimum
and maximum tender price amounts and the timing of the commencement of the Offer.
The Board of Directors considered the Offer and
whether it would be in the best interests of the Corporation. Furthermore, a special committee of the Board of Directors was not considered
necessary given that no director had, to the knowledge of the Corporation and its directors and officers, after reasonable inquiry, indicated
any present intention as of the date hereof to deposit any Shares pursuant to the Offer. Accordingly, no actual conflict of interest was
present to necessitate the establishment of a special committee.
In evaluating the Offer and determining that it
would be in the best interests of the Corporation, the Board of Directors gave careful consideration to a number of factors, including,
without limitation, the following:
| (a) | the view of the Corporation’s management that the recent trading price of Shares is not fully reflective
of the value of the Corporation’s business and future prospects and that, therefore, the purchase of Shares under the Offer represents
an attractive investment and an equitable and efficient means of providing value to its Shareholders and is in the best interests of the
Corporation and its Shareholders; |
| (b) | the Board’s belief that the Offer is a prudent use of the Corporation’s financial resources
given its business profile, financial results and assets, the current market price of Shares, and its ongoing cash requirements relative
to its existing cash balance, projected financial performance and access to additional capital; |
| (c) | the financial advice of Canaccord Genuity in respect of the Offer; |
| (d) | Canaccord Genuity’s confirmation that it expected to be in a position to deliver the Liquidity Opinion
prior to the commencement of the Offer, subject to the qualifications, assumptions and limitations customary in such opinions and provided
that there was no material change in the liquidity of Shares prior to the commencement of the Offer; |
| (e) | the positive impact that the purchase of Shares having an aggregate Purchase Price not exceeding $40,000,000
would have on the Corporation’s earnings and cash flow calculated on a per Share basis, as well as on the return on equity on Shares; |
| (f) | after giving effect to the Offer, the Corporation will continue to have sufficient financial resources
and working capital to conduct its ongoing business and operations and the Offer is not expected to preclude the Corporation from pursuing
its foreseeable business opportunities or the future growth of the Corporation’s business; |
| (g) | as the Offer is structured as a “Dutch auction”, it provides Shareholders with an opportunity
to realize on all or a portion of their investment in the Corporation, should they desire liquidity, in quantities which might not otherwise
be available in the market and (i) to determine the price at which they are willing to sell their Shares if such Shares are tendered pursuant
to an Auction Tender or (ii) tender their Shares without specifying a price if such Shares are deposited pursuant to a Purchase Price
Tender and, in each case, to sell their Shares without incurring brokerage fees or commissions (subject to any fees or commissions that
non-registered Shareholders may be charged by the nominee holding their Shares on their behalf) which might otherwise be payable on a
sale of their Shares in a transaction on the TSX or Nasdaq; |
| (h) | tendering Shares under the Offer is optional and available to all Shareholders, and, therefore, each Shareholder
is free to accept or reject the Offer; |
| (i) | the Offer is not conditional upon the receipt of financing or any minimum number of Shares being tendered; |
| (j) | Shareholders who do not tender their Shares to the Offer will realize a proportionate increase in their
equity interest in the Corporation to the extent Shares are purchased by the Corporation pursuant to the Offer; |
| (k) | the Purchase Price represents a premium of up to 11.81% and 11.05%, respectively, over the closing price
of Shares on the TSX and Nasdaq on July 25, 2023, being the last full trading day prior to the announcement of the Offer; |
| (l) | Shareholders beneficially owning fewer than 100 Shares and whose Shares are purchased pursuant to the
Offer will avoid any applicable “Odd Lot” discounts that might otherwise be payable on a sale of their Shares in a transaction
on the TSX or Nasdaq; |
| (m) | based on the Liquidity Opinion, it is reasonable to conclude that, following the completion of the Offer
in accordance with its terms, there would be a market for beneficial owners of Shares who do not tender to the Offer that is not materially
less liquid than the market that existed at the time of the making of the Offer; and |
| (n) | following completion of the Offer in accordance with its terms, any change in the profile of the shareholder
base of the Corporation should not have a negative impact on Shareholders. |
The foregoing summary of the factors considered
by the Board of Directors is not, and is not intended to be, exhaustive. In view of the variety of factors and the amount of information
considered in connection with its determination to proceed with the Offer, the Board of Directors did not find it practical to, and did
not, quantify or otherwise attempt to assign any relative weight to each specific factor considered in reaching its conclusion.
The Board of Directors, based on careful consideration
of the above-mentioned reasons, determined that the Offer is in the best interests of the Corporation and authorized and approved on July
26, 2023 the making of the Offer, its final pricing, the Offer, including this Circular and related documents, and the delivery of thereof
to security holders.
None of illumin, its Board of Directors, the
Dealer Managers or the Depositary makes any recommendation to any Shareholder as to whether to tender or refrain from tendering Shares
under the Offer, whether Shareholders should elect an Auction Tender or a Purchase Price Tender, or as to the purchase price or purchase
prices at which Shareholders may tender Shares under the Offer. Shareholders are urged to evaluate carefully all information in the Offer,
consult their own financial, legal, investment and tax advisors and make their own decisions as to whether to tender Shares under the
Offer, and, if so, how many Shares to tender and the price or prices at which to tender. For additional information, see “Issuer
Bid Circular – Income Tax Consequences”.
Canadian securities laws prohibit the Corporation
and its affiliates from acquiring or offering to acquire beneficial ownership of any Shares, other than pursuant to the Offer, until at
least 20 business days after the Expiration Date or termination of the Offer, except, in the case of acquisitions during the period following
the Expiration Date, pursuant to certain acquisitions effected in the normal course on a published market or as otherwise permitted by
applicable law.
Subject to applicable law, the Corporation may
in the future purchase additional Shares on the open market, in private transactions, through issuer bids or otherwise, including a new
normal course issuer bid. Any such purchases may be on the same terms or on terms that are more or less favourable to Shareholders than
the terms of the Offer. Any possible future purchases by the Corporation will depend on many factors, including the market price of Shares,
the Corporation’s business and financial position, the results of the Offer and general economic and market conditions.
Shareholders who do not tender their Shares to
the Offer or whose Shares are not accepted due to the preferential acceptance of odd lots or proration should be aware that while remaining
Shareholders will have a proportionately increased equity interest in the Corporation, the amounts available for future returns of capital
to Shareholders, if any, on a per Share basis may be less than the Purchase Price under the Offer.
As at July 25, 2023, there were 56,185,631 Shares
issued and outstanding, of which 49,533,237 Shares comprise the “public float”, which excludes Shares beneficially owned,
or over which control or direction is exercised, by “related parties” of the Corporation as defined under applicable Canadian
securities laws (which includes our directors and executive officers and any of our subsidiaries as well as any person that beneficially
owns or exercises control or direction over 10% or more of the issued and outstanding Shares). The maximum number of Shares that the Corporation
is offering to purchase pursuant to the Offer, if the Purchase Price is determined to be $2.53 (being the minimum Purchase Price under
the Offer), represents approximately 28.14% of Shares outstanding on that date. If the Corporation purchases such maximum number of Shares,
the “public float” will comprise approximately 33,722,961
Shares.
The Corporation is relying on the “liquid
market exemption” specified in MI 61-101 from the requirement to obtain a formal valuation that would otherwise be applicable to
the Offer.
While not required under applicable securities
laws, the Board of Directors has voluntarily obtained the Liquidity Opinion from Canaccord Genuity to the effect that, as of July 26,
2023, based on and subject to the qualifications, assumptions and limitations stated in the Liquidity Opinion: (a) a liquid market for
Shares exists; and (b) it is reasonable to conclude that, following the completion of the Offer in accordance with its terms, there will
be a market for holders of Shares who do not tender to the Offer that is not materially less liquid than the market that existed at the
time of the making of the Offer. Accordingly, the Corporation is exempted from the valuation requirements of the securities regulatory
authorities in Canada applicable to issuer bids generally in connection with the Offer.
The full text of the Liquidity Opinion, setting
out the assumptions made, matters considered and limitations and qualifications on the review undertaken by Canaccord Genuity in connection
with the Liquidity Opinion, is attached as Schedule A. The summary of the Liquidity Opinion in the Offer to Purchase and this Circular
is qualified in its entirety by reference to the full text of the Liquidity Opinion. The Liquidity Opinion is not a recommendation to
any Shareholder as to whether to tender or refrain from tendering Shares. Shareholders should read the Liquidity Opinion attached hereto
at Schedule A in its entirety. The Liquidity Opinion was provided to the Board of Directors for its exclusive use only in determining
the availability of an exemption from the formal valuation requirements of MI 61-101 in connection with the Offer and may not be used
or relied upon by any other person or for any other purpose. As financial advisor to the Corporation and dealer manager for the Offer
in Canada, Canaccord Genuity is not independent of the Corporation for purposes of MI 61-101.
| 3.3 | Additional Securities Law Considerations |
The Corporation is a reporting issuer (or the
equivalent thereof) in all provinces and territories of Canada, and Shares are listed on the TSX and Nasdaq. The Corporation believes
that the purchase of Shares pursuant to the Offer will not result in: (i) illumin ceasing to be a reporting issuer in any province or
territory of Canada or (ii) Shares being delisted from the TSX or Nasdaq.
Shares are also registered under Section 12(b)
of the Exchange Act. The Corporation believes that the purchase of Shares pursuant to the Offer will not result in Shares becoming eligible
for deregistration under the Exchange Act.
Shares are currently “margin securities”
under the rules of the U.S. Federal Reserve Board. This has the effect, among other things, of allowing brokers to extend credit on the
collateral of Shares. The Corporation believes that, following the repurchase of Shares pursuant to the Offer, Shares will continue to
be margin securities for the purposes of the U.S. Federal Reserve Board’s margin regulations.
The withdrawal rights of Shareholders are described
under “Offer to Purchase – Withdrawal Rights” and are incorporated into and form part of this Circular.
| 5. | Price Range and Trading Volume of Shares |
The outstanding Shares are traded on the TSX under
the trading symbol ‘ILLM. The following tables set forth the price range and trading volume of Shares as reported by the TSX for
the periods indicated below. The weighted average trading price of the Shares for the ten trading days ending July 25, 2023 was $2.41
per Share on the TSX.
| Month (2022 – 2023) | |
High Price
($) | |
Low Price
($) | |
Volume
(In 000’s) |
| December | |
$ | 2.72 | | |
$ | 1.93 | | |
| 3,473 | |
| January | |
$ | 2.47 | | |
$ | 2.10 | | |
| 2,969 | |
| February | |
$ | 2.63 | | |
$ | 2.07 | | |
| 2,448 | |
| March | |
$ | 2.55 | | |
$ | 1.92 | | |
| 4,711 | |
| April | |
$ | 2.27 | | |
$ | 1.94 | | |
| 1,871 | |
| May | |
$ | 2.44 | | |
$ | 1.84 | | |
| 1,498 | |
| June | |
$ | 2.44 | | |
$ | 2.08 | | |
| 1,073 | |
| July 1 to July 25 | |
$ | 2.55 | | |
$ | 2.10 | | |
| 861 | |
| Quarter | |
High Price
($) | |
Low Price
($) |
| Three Months ended December 31, 2022 | |
$ | 2.72 | | |
$ | 1.86 | |
| Three Months ended March 31, 2023 | |
$ | 2.63 | | |
$ | 1.92 | |
The outstanding Shares are also traded on Nasdaq
under the trading symbol ‘ILLM. The following table sets forth the price range and trading volume of Shares as reported by Nasdaq
for the six-month period preceding the date hereof. The weighted average trading price of the Shares for the ten trading days ending July
25, 2023 was US$1.81 per Share on Nasdaq.
| Month (2021 – 2022) | |
High Price
(US$) | |
Low Price
(US$) | |
Volume
(In 000’s) |
| December | |
$ | 2.00 | | |
$ | 1.42 | | |
| 1,260 | |
| January | |
$ | 1.84 | | |
$ | 1.55 | | |
| 1,191 | |
| February | |
$ | 1.97 | | |
$ | 1.52 | | |
| 910 | |
| March | |
$ | 1.85 | | |
$ | 1.45 | | |
| 1,493 | |
| April | |
$ | 1.67 | | |
$ | 1.43 | | |
| 755 | |
| May | |
$ | 1.80 | | |
$ | 1.38 | | |
| 1,246 | |
| June | |
$ | 1.84 | | |
$ | 1.57 | | |
| 867 | |
| July 1 to July 25 | |
$ | 1.91 | | |
$ | 1.62 | | |
| 597 | |
| Quarter | |
High Price
(US$) | |
Low Price
(US$) |
| Three Months ended December 31, 2022 | |
$ | 2.00 | | |
$ | 1.38 | |
| Three Months ended March 31, 2023 | |
$ | 1.97 | | |
$ | 1.45 | |
On July 25, 2023, the date prior to the announcement
of the Corporation’s intention to proceed with a substantial issuer bid, the closing price on the TSX was $2.37 per Share and on
Nasdaq was US$1.81 per Share. Shareholders are urged to obtain current market quotations for Shares.
The Corporation is not currently paying any dividends
on Shares and it is not expected that illumin will declare any dividends for the foreseeable future. The Corporation may, in its discretion,
retain any earnings to finance the operation and expansion of its business, and accordingly, may not pay any dividends in the future.
| 7. | Previous Distributions and Purchases of Securities |
| 7.1 | Previous Purchases and Sales of Securities |
The Corporation received approval from the TSX
on May 16, 2022 to commence a normal course issuer bid for up to 5,500,000 Shares during the 12-month period commencing on May 16, 2022
and ending May 15, 2023. Between May 16, 2022 and May 15, 2023, illumin purchased 5,404,894 Shares, at an average price of $2.96 per Share.
Shares were purchased on behalf of the Corporation by a registered broker through the facilities of the TSX and through other alternative
Canadian trading platforms at the prevailing market price at the time of such transaction.
Except as described under “Issuer Bid Circular
– Previous Distributions of Securities” below, no securities of the Corporation have been issued by the Corporation during
the twelve months proceeding the date of the Offer.
| 7.2 | Previous Distributions of Securities |
Previous Offerings
On May 22, 2019, illumin completed a short form
prospectus bought deal offering of 5,936,300 Shares at a price of $1.55 per Share for aggregate gross proceeds to the Corporation of $9,201,265,
which included the full exercise by the underwriters of the over-allotment option.
On December 4, 2020, illumin and certain of its
Shareholders completed a short form prospectus bought deal offering comprised of 1,968,000 Shares issued from treasury and offered by
the Corporation for gross proceeds to the Corporation of approximately $12 million and 1,804,000 Shares offered by certain Shareholders,
namely 2794606 Ontario Ltd. and OV2 Capital Inc., for gross proceeds to those selling shareholders of approximately $11 million.
On June 14, 2021, illumin completed a public offering
of 5,665,025 Shares in the United States and Canada, including the exercise in full by the underwriters of their over-allotment option,
at a price of US$10.15 ($12.25) per Share, for gross proceeds to the Corporation of US$57,500,003 ($69,396,556). In connection with this
public offering, on June 21, 2021, Shares were listed and began trading on Nasdaq.
Omnibus Incentive Plan, Option Plan and
DSU Plan
In the five years preceding the date of the Offer,
5,468,762 Shares have been issued by the Corporation upon the exercise
of rights to purchase or otherwise acquire Shares which were granted in connection with the Corporation’s omnibus long-term incentive
plan (the “Omnibus Incentive Plan”) the existing amended and restated stock option plan first approved by Shareholders
on June 14, 2016 (the “Option Plan”), and the legacy third amended and restated deferred share unit plan first
approved by Shareholders on June 14, 2016 (the “DSU Plan”) of the Corporation.
The table below indicates the numbers of Shares
that were issued by the Corporation on an annual basis since the inception of the Omnibus Incentive Plan on April 13, 2020 upon the exercise
of Options to purchase Shares and upon the conversion of restricted share units (“RSUs”), performance share units (“PSUs”)
and deferred share units (“DSUs”) to Shares pursuant to the Corporation’s Omnibus Incentive Plan, the Option
Plan and the DSU Plan, as applicable:
| Year of Distribution |
Number of Shares Issued on Exercise |
Average Exercise Price per Share |
Aggregate Proceeds |
| |
|
|
|
| Options (under the Option Plan) |
| January 1, 2018 to December 31, 2018 |
254,570 |
$0.81 |
$205,826 |
| January 1, 2019 to December 31, 2019 |
240,167 |
$0.96 |
$230,872 |
| January 1, 2020 to December 31, 2020 |
1,133,482 |
$1.29 |
$1,465,658 |
| January 1, 2021 to December 31, 2021 |
745,517 |
$1.41 |
$1,054,673 |
| January 1, 2022 to December 31, 2022 |
247,866 |
$1.51 |
$374,037 |
| January 1, 2023 to July 25, 2023 |
Nil |
Nil |
Nil |
| |
|
|
|
| Options (under the Omnibus Incentive Plan) |
| April 13, 2020 to December 31, 2020 |
Nil |
Nil |
Nil |
| January 1, 2021 to December 31, 2021 |
11,666 |
$2.09 |
$24,382 |
| January 1, 2022 to December 31, 2022 |
Nil |
Nil |
Nil |
| January 1, 2023 to July 25, 2023 |
Nil |
Nil |
Nil |
| |
|
|
|
| DSUs (under the DSU Plan) |
| January 1, 2018 to December 31, 2018 |
157,323 |
$0.00 |
Nil |
| January 1, 2019 to December 31, 2019 |
140,858 |
$0.00 |
Nil |
| January 1, 2020 to December 31, 2020 |
981,578 |
$0.00 |
Nil |
| January 1, 2021 to December 31, 2021 |
540,175 |
$0.00 |
Nil |
| January 1, 2022 to December 31, 2022 |
172,209 |
$0.00 |
Nil |
| January 1, 2023 to July 25, 2023 |
31,666 |
$0.00 |
Nil |
| |
|
|
|
| RSUs, PSUs, and DSUs (under the Omnibus Incentive Plan) |
| April 13, 2020 to December 31, 2020 |
97,129 |
$0.00 |
Nil |
| January 1, 2021 to December 31, 2021 |
309,575 |
$0.00 |
Nil |
| January 1, 2022 to December 31, 2022 |
358,823 |
$0.00 |
Nil |
| January 1, 2023 to July 25, 2023 |
46,158 |
$0.00 |
Nil |
| 8. | Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Shares |
| 8.1 | Interests of Directors and Executive Officers |
Except as set forth in the Offer, neither the
Corporation nor, to the Corporation’s knowledge, any of its directors or executive officers is a party to any agreement, commitment
or understanding, formal or informal, with any securityholder relating, directly or indirectly, to the Offer or with any other person
or company with respect to any securities of the Corporation in relation to the Offer, nor are there any contracts or arrangements made
or proposed to be made between the Corporation and any of its directors or executive officers and no payments or other benefits are proposed
to be made or given by way of compensation for loss of office or as to such directors or executive officers remaining in or retiring from
office if the Offer is successful.
Except as disclosed herein, neither the Corporation
nor, to the Corporation’s knowledge, any of its directors or executive officers has current plans or proposals which relate to,
or would result in, any extraordinary corporate transaction involving the Corporation, such as: a “going private transaction”;
merger; reorganization; liquidation; the sale or transfer of a material amount of its assets or the assets of any of its subsidiaries
(although the Corporation may from time to time consider various acquisition or divestiture opportunities); the purchase of a material
amount of assets; any change in its present Board of Directors or management; any material change in its indebtedness, dividend policy
or capitalization; any other material change in its business or corporate structure; any material change in its articles or by-laws; or
other actions that could impede the acquisition of control of the Corporation, cause any class of equity securities of the Corporation
to be delisted from the TSX or Nasdaq, cause any class of equity securities of the Corporation to become eligible for termination of registration
under the Exchange Act, result in the acquisition by any person of additional securities of the Corporation or the disposition of securities
of the Corporation, or any actions similar to any of the foregoing.
| 8.2 | Ownership of Securities of the Corporation |
To the knowledge of the Corporation, after reasonable
inquiry, the following table indicates, as at July 25, 2023, the number of securities of the Corporation beneficially owned or over which
control or direction is exercised, by each director and executive officer of the Corporation and, to the extent known by the Corporation
after reasonable inquiry, by (a) each associate or affiliate of an insider of the Corporation, (b) each associate or affiliate of the
Corporation, (c) each other insider, as defined in applicable law, of the Corporation, and (d) each person acting jointly or in concert
with the Corporation, and the percentage such number of securities represents of the applicable total outstanding number of such securities.
| |
|
Shares |
|
DSUs |
|
RSUs |
|
Options |
| Name(1) |
Relationship with illumin |
No. of Shares |
% of Outstanding Shares |
|
No. of DSUs |
% of Outstanding DSUs |
|
No. of RSUs |
% of Outstanding RSUs |
|
No. of Options |
% of Outstanding Options |
| Directors |
|
|
|
|
|
|
|
|
|
|
|
|
| Tal Hayek |
Director, Co-Founder, and Chief Executive Officer |
2,401,599 |
4.27 |
|
- |
- |
|
581,281 |
9.92 |
|
125,000 |
17.62 |
| Sheldon Pollack |
Director |
1,969,452 |
3.51 |
|
16,575 |
4.68 |
|
- |
- |
|
80,000 |
11.28 |
| Roger Dent |
Director |
80,000 |
0.14 |
|
73,566 |
20.79 |
|
2,500 |
0.04 |
|
- |
- |
| Igal Mayer |
Director |
96,837 |
0.17 |
|
73,566 |
20.79 |
|
2,500 |
0.04 |
|
70,000 |
9.87 |
| Yishay Waxman |
Director |
50,000 |
0.09 |
|
13,812 |
3.90 |
|
2,273 |
0.04 |
|
30,000 |
4.23 |
| Michele Tobin |
Director |
0 |
0 |
|
32,258 |
9.11 |
|
- |
- |
|
- |
- |
| Paul Khawaja |
Director |
0 |
0 |
|
24,038 |
6.79 |
|
- |
- |
|
- |
- |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Officers |
|
|
|
|
|
|
|
|
|
|
|
|
| Elliot Muchnik |
Chief Financial Officer |
23,330 |
0.04 |
|
- |
- |
|
282,809 |
4.82 |
|
- |
- |
| Rachel Kapcan |
Co-Founder and Chief Product Officer |
1,985,355 |
3.53 |
|
- |
- |
|
573,914 |
9.79 |
|
- |
- |
| Oren Hisherik |
Chief Information and Technology Officer |
45,821 |
0.08 |
|
24,358 |
6.88 |
|
320,775 |
5.47 |
|
50,000 |
7.05 |
| Neil Phasey |
Chief Operating Officer |
0 |
0 |
|
- |
- |
|
94,697 |
1.62 |
|
- |
- |
| |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The business
address of each director, officer, and senior management above is Suite 1200, 70 University Avenue, Toronto, Ontario M5J 2M4.
As of July 25, 2023, all directors and executive
officers of the Corporation as a group beneficially owned or exercised control or direction over an aggregate of 6,652,394 Shares representing
approximately 11.84% of Shares outstanding.
To the knowledge of the directors and executive
officers of the Corporation, as of July 25, 2023, no person or company beneficially owns, directly or indirectly, or exercises control
or direction over, voting securities of the Corporation carrying 10% or more of the voting rights attached to any class of voting securities
of the Corporation.
| 8.3 | Recent Securities Transactions |
Based on our records and on information provided
to us by our directors, executive officers, affiliates and subsidiaries, neither we nor any of our directors, our executive officers,
or our affiliates or our subsidiaries nor, to the best of our knowledge, any person controlling the Corporation or any executive officer
or director of any such controlling entity or of our subsidiaries, has effected any transactions involving Shares during the 60 days prior
to the date hereof.
| 8.4 | Arrangements Concerning Shares |
Acceptance of the Offer
To the knowledge of the Corporation and to the
knowledge of its directors and executive officers, after reasonable inquiry, none of its directors or executive officers, nor any associate
or affiliate of its directors or executive officers, none of the Corporation’s associates or affiliates, nor any of the Corporation’s
other insiders as defined in applicable law and no person or company acting jointly or in concert with the Corporation, will tender any
of such person’s Shares pursuant to the Offer. Those persons listed above who do not tender their Shares pursuant to the Offer will
realize a proportionate increase in their interest in the Corporation to the extent that Shares are purchased by us pursuant to the Offer.
Effect of the Offer on Voting Interests
Shareholders who do not deposit their Shares under
the Offer will realize a proportionate increase in their equity interest in illumin to the extent that Shares are purchased by illumin
pursuant to the Offer.
Commitments to Acquire Shares
The Corporation has no agreements, commitments
or understandings to purchase Shares or other securities of the Corporation, other than pursuant to the Offer, and securities issued,
purchased or sold pursuant to the exercise of employee stock options, in connection with the Omnibus Incentive Plan or in connection with
the Corporation’s other security-based compensation arrangements, and as otherwise described in this Offer to Purchase and this
Circular.
Applicable Canadian securities laws generally
prohibit the Corporation and persons or companies acting jointly or in concert with the Corporation from acquiring or offering to acquire
beneficial ownership of any Shares, other than pursuant to the Offer, from the period commencing on the date of announcement of the Corporation’s
intention to make the Offer until the Expiration Time. In addition, the Corporation and persons or companies acting jointly or in concert
with the Corporation are prohibited from acquiring or offering to acquire beneficial ownership of any Shares during the period commencing
with the Expiration Time and ending on the 20th business day thereafter, except that, in the case of acquisitions during the
period following the Expiration Time, pursuant to certain acquisitions effected in the normal course on a published market or as otherwise
permitted by applicable law.
Accordingly, illumin has not purchased and will
not purchase Shares since the time the Offer was publicly announced until its expiration. illumin may in the future, subject to applicable
law, purchase additional Shares on the open market, in private transactions, through normal course issuer bids, other issuer bids or otherwise.
Any such purchases may be on the same terms or on terms which are more or less favorable to Shareholders than the terms of the Offer.
Any possible future purchases by the Corporation will depend on many factors, including the market price of Shares, the Corporation’s
business and financial position, the results of the Offer and general economic and market conditions.
To the knowledge of the Corporation, after reasonable
inquiry, no person or company referred to in this Circular under “Issuer Bid Circular – Interest of Directors and Officers;
Transactions and Arrangements Concerning Shares” has any agreement, commitment or understanding to acquire securities of the Corporation
other than pursuant to the Corporation’s security-based compensation arrangements. A description of the Omnibus Incentive Plan,
the Option Plan and the DSU Plan is below.
Omnibus
Incentive Plan, Option Plan and DSU Plan
The Corporation offers long-term incentives to
its officers, directors, employees and consultants and non-employee directors pursuant to the Omnibus Incentive Plan, the Option Plan,
and the DSU Plan. As of July 25, 2023, there are a total of 709,470 Options, 6,215,818 RSUs and DSUs issued and outstanding, including
20,001 Options and 5,861,908 RSUs and DSUs awarded under the Omnibus Incentive Plan, and 689,469 Options and 353,910 DSUs issued under
the predecessor Option Plan and DSU Plan, respectively.
Omnibus Incentive Plan. The Omnibus Incentive
Plan was approved by the Board of Directors effective April 13, 2020, and received shareholder ratification on June 16, 2020. The maximum
number of Shares reserved for issuance, in the aggregate, under the Omnibus Incentive Plan, the Option Plan, the DSU Plan and any other
security-based compensation arrangement, collectively, is 15% of the aggregate number of Shares issued and outstanding from time to time.
The Omnibus Incentive Plan allows for a variety of equity-based awards that provide different types of incentives to be granted to certain
officers, directors, employees and consultants (in the case of Options, RSUs and PSUs) and non-employee directors (in the case of DSUs)
pursuant to the discretion of the Plan Administrator (as defined in the Omnibus Incentive Plan).
Unless the Plan Administrator decides otherwise,
the participant’s grant agreement will provide that any Options granted will vest over a 3-year period as follows: 1/3 at the first
anniversary of the date of such grant and 1/3 each subsequent anniversary for the remaining two years following the first anniversary
of the date of such grant. Otherwise, Options granted under the Omnibus Incentive Plan vest in accordance with the terms of the applicable
grant agreement. An Option shall be exercisable during a period established by the Plan Administrator which shall commence on the date
of the grant and shall terminate no later than ten years after the date of the granting of the Option or such shorter period as the Plan
Administrator may determine. The minimum exercise price of an Option will be determined based on the closing price of Shares on the TSX
on the last trading day before the date such Option is granted.
Certain events, including termination for cause,
resignation, retirement, termination other than for cause, and death or long-term disability may impact the rights of holders of Options.
Such events and related impact are set forth in the Omnibus Incentive Plan, and are subject to the terms of a participant’s employment
agreement, grant agreement, and the certain change of control provisions.
The terms and conditions of grants of RSUs, PSUs
and DSUs (including the quantity, type of award, grant date, vesting conditions, vesting periods, settlement, settlement date and other
terms and conditions with respect to these awards) as well as the impact of certain prescribed events on the respective holder, are set
out in the participant’s grant agreement.
Option Plan. Since the adoption of the
Omnibus Incentive Plan, no further awards have been or will be granted under the Option Plan. However, Options that were issued prior
to April 13, 2020 under the Option Plan remain outstanding and are governed by the terms of the Option Plan.
The Options that remain outstanding under the
Option Plan are non-assignable and were granted for a term of five years from the date of grant, and are subject to the terms of a participant’s
employment agreement, grant agreement, and the certain change of control provisions. Options issued under the Option Plan vest at the
discretion of the Board of Directors, subject to the rules or policies of the TSX and certain specified limitations.
DSU Plan. Since the adoption of the Omnibus
Incentive Plan, no further awards have been or will be granted under the DSU Plan. However, DSUs that were issued prior to April 13, 2020
under the DSU Plan remain outstanding and are governed by the terms of the DSU Plan.
Subject to applicable income tax and other withholdings
as required by law, the value of the vested DSUs redeemed by or in respect of a Participant (as defined in the DSU Plan) will be paid
to the Participant, at the election of the Participant, in the form of Shares. Any vesting conditions (which may include time restrictions,
performance conditions or a combination of both) for DSUs was determined by the Compensation and Corporate Governance Committee in advance
of any grants. The Board of Directors may also, in its sole and absolute discretion, accelerate and/or waive any vesting or other conditions
for all or any DSUs for any Participant at any time and from time to time.
The value of each DSU awarded by the Corporation
is equal to the Market Price (as defined in the DSU Plan) of Shares at the time the DSU is awarded. The value of the DSU increases or
decreases as the price of Shares increases or decreases. DSUs generally vest upon redemption, subject to the discretion of the Board,
and are credited to a Participant’s DSU Account (as defined in the DSU Plan).
Benefits from the Offer
No person or company named under “Issuer
Bid Circular – Interest of Directors and Officers; Transactions and Arrangements Concerning Shares” will receive any direct
or indirect benefit from accepting or refusing to accept the Offer other than the Purchase Price for any Shares tendered to the Offer
and purchased by the Corporation in accordance with the terms of the Offer and any benefit available to any Shareholder who does or does
not participate in the Offer.
Contracts, Arrangements or Understandings
with Shareholders
Except as described or referred to in the Offer,
there are no contracts, arrangements or understandings, formal or informal, made or proposed to be made between the Corporation and any
holder of any securities of the Corporation in relation to the Offer.
| 9. | Material Changes in the Affairs of the Corporation |
Except as described or referred to herein, the
directors and executive officers of the Corporation are not currently aware of any plans or proposals for material changes in the affairs
of the Corporation, or of any undisclosed material changes that have occurred since May 11, 2023, which is the date of the Corporation’s
most recent interim financial statements accessible through SEDAR+ and EDGAR, other than the information disclosed in the Corporation’s
material change report dated July 26, 2023.
| 10. | Valuation and Bona Fide Prior Offers |
The Corporation is relying on the “liquid
market exemption” specified in MI 61-101. Accordingly, the valuation requirements of securities regulatory authorities in Canada
applicable to issuer bids generally are not applicable in connection with the Offer.
To the Corporation’s knowledge, or the knowledge
of any of its directors or executive officers, after reasonable inquiry, no prior valuation (as such term is defined in MI 61-101) regarding
illumin, its securities or material assets has been made in the 24 months before the date of the Offer.
There were no bona fide prior offers that
relate to Shares or are otherwise relevant to the Offer received by the Corporation during the 24 months before the date of the Offer.
| 11. | Accounting Treatment of the Offer |
The accounting treatment for the Corporation’s
purchase of Shares in the Offer will result in a reduction in the Corporation’s share capital by an amount equal to the number of
Shares purchased pursuant to the Offer multiplied by the average carrying amount of Shares, with any excess allocated to retained earnings.
| 12. | Income Tax Consequences |
| 12.1 | Certain Canadian Federal Income Tax Considerations |
General
The following general summary describes, as of
the date hereof, certain material Canadian federal income tax considerations under the Tax Act generally applicable to a beneficial owner
of Shares that properly tenders and sells Shares to illumin pursuant to the Offer.
This summary is based on the current provisions
of the Tax Act, all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior
to the date hereof (the “Tax Proposals”) and counsel’s understanding of the current administrative policies and
assessing practices of the CRA which have been published in writing prior to the date hereof. The summary assumes that all of the Tax
Proposals will be implemented in the form proposed, although no assurance in this regard can be given. This summary does not otherwise
take into account or anticipate any changes in law or administrative policies and assessing practices, whether by legislative, regulatory,
administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign tax considerations, which
may differ significantly from those discussed herein.
This summary is not applicable to a Shareholder
(i) that is a “financial institution” for the purposes of the “mark-to-market” rules, (ii) that is a “specified
financial institution”, (iii) that reports its “Canadian tax results” in a currency other than Canadian dollars, (iv)
an interest in which is a “tax shelter investment”, or (v) that has entered into a “derivative forward agreement”
or a “dividend rental arrangement” in respect of Shares, as each of those terms is defined in the Tax Act. This summary is
also not applicable to a Shareholder that acquired Shares pursuant to the exercise of an employee stock option or otherwise in connection
with his or her employment and who disposes of such Shares pursuant to the Offer. All of the foregoing Shareholders should consult their
own tax advisors regarding their particular circumstances.
This summary is not exhaustive of all Canadian
federal income tax considerations. Further, this summary is of a general nature only and is not intended to be, nor should it be considered
to be, legal or tax advice to any particular Shareholder and no representation is made with respect to the income tax consequences to
any particular Shareholder. Accordingly, Shareholders should consult their own tax advisors concerning the application and effect of the
income and other taxes of any country, province, territory, state or local tax authority, having regard to their particular circumstances.
THE DEEMED DIVIDEND TAX TREATMENT DESCRIBED
BELOW ON THE SALE OF SHARES PURSUANT TO THE OFFER DIFFERS FROM THE CAPITAL GAIN (OR CAPITAL LOSS) TREATMENT WHICH WOULD GENERALLY APPLY
TO A SALE OF SHARES IN THE MARKET. ACCORDINGLY, SHAREHOLDERS WHO WISH TO SELL THEIR SHARES AND WHO ARE NOT GENERALLY EXEMPT FROM CANADIAN
FEDERAL INCOME TAX SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING SELLING THEIR SHARES IN THE MARKET AS AN ALTERNATIVE TO SELLING SHARES
PURSUANT TO THE OFFER.
Canadian Currency
Generally, for purposes of the Tax Act, all amounts
relating to the acquisition, holding or disposition or deemed disposition of a Share must be expressed in Canadian dollars. Amounts denominated
in another currency must be converted into Canadian dollars using the applicable rate of exchange (for purposes of the Tax Act) quoted
by the Bank of Canada on the date such amounts arose, or such other rate of exchange as is acceptable to the CRA.
Shareholders Resident in Canada
The following portion of the summary is, subject
to the discussion under “General” above, applicable to a Shareholder who, for purposes of the Tax Act and at all relevant
times, (i) is, or is deemed to be, a resident of Canada, (ii) deals at arm’s length with, and is not affiliated with, illumin, (iii)
holds its Shares as capital property and (iv) is not exempt from tax under Part I of the Tax Act (a “Canadian Holder”).
Shares will generally be considered to be capital property to a Canadian Holder provided that the Canadian Holder does not hold Shares
in the course of carrying on a business of buying and selling Shares and has not acquired Shares in a transaction considered to be an
adventure or concern in the nature of trade. Certain Canadian Holders that might not otherwise be considered to hold their Shares as capital
property may, in certain circumstances, be entitled to make the irrevocable election permitted by subsection 39(4) of the Tax Act to have
Shares and every other “Canadian security” (as defined in the Tax Act) owned by such Canadian Holders in the taxation year
of the election and all subsequent taxation years deemed to be capital property. Such Canadian Holders should consult their own tax advisors
for advice with respect to whether an election under subsection 39(4) of the Tax Act is available or advisable having regard to their
particular circumstances.
Disposition of Shares and Deemed Dividend
A Canadian Holder who sells Shares to illumin
pursuant to the Offer will be deemed to receive a taxable dividend equal to the excess, if any, of the amount paid by illumin for Shares
over the paid-up capital of such Shares for purposes of the Tax Act. The Corporation estimates that the paid-up capital per Share as of
the date hereof is approximately $2.30 (and, following the Expiration Date, illumin will advise Shareholders of any material change to
this estimate). The exact quantum of the deemed dividend, if any, cannot be guaranteed.
Any dividend deemed to be received by a Canadian
Holder who is an individual (including certain trusts) will be subject to the gross-up and dividend tax credit rules normally applicable
to taxable dividends received by Canadian resident individuals from a taxable Canadian corporation, including the enhanced gross-up and
dividend tax credit if illumin validly designates the dividend as an “eligible dividend”. There may be limitations on the
ability of a corporation to designate dividends as eligible dividends. Subject to such limitations, illumin intends to designate all such
deemed dividends arising as a result of a sale of Shares pursuant to the Offer as eligible dividends for these purposes.
Subject to the application of subsection 55(2)
of the Tax Act, as described below, any dividend deemed to be received by a Canadian Holder that is a corporation will be included in
computing such Canadian Holder’s income as a dividend, and will ordinarily be deductible in computing its taxable income subject
also to all other limitations under the Tax Act. To the extent that such a deduction is available, private corporations (as defined in
the Tax Act) and certain other corporations may be liable to pay refundable tax under Part IV of the Tax Act.
Under subsection 55(2) of the Tax Act, a Canadian
Holder that is a corporation may be required to treat all or a portion of any deemed dividend that is deductible in computing its taxable
income as proceeds of disposition and not as a dividend, generally in circumstances where: (i) the Canadian Holder would have realized
a capital gain had it disposed of any Share at fair market value immediately before the sale of Shares to illumin pursuant to the Offer;
(ii) the sale to illumin resulted in a significant reduction in such capital gain; and (iii) the amount of the deemed dividend exceeds
the “safe income” in respect of the particular Share that could reasonably be considered to contribute to such capital gain
(as determined for purposes of the Tax Act). The application of subsection 55(2) involves a number of factual considerations that will
differ for each corporate Canadian Holder, and a Canadian Holder to which it may be relevant is urged to consult its own tax advisors
concerning its application having regard to its particular circumstances.
The amount paid by illumin pursuant to the Offer
for Shares less any amount deemed to be received by the Canadian Holder as a dividend (after the application of subsection 55(2) in the
case of a corporate Canadian Holder) will be treated as proceeds of disposition of Shares. The Canadian Holder will realize a capital
gain (or capital loss) on the disposition of Shares equal to the amount by which the Canadian Holder’s proceeds of disposition,
net of any costs of disposition, exceed (or are less than) the adjusted cost base to the Canadian Holder of Shares sold to illumin pursuant
to the Offer.
Taxation of Capital Gains and Losses
Generally, a Canadian Holder will be required
to include in computing its income for a taxation year one-half of any capital gain (a “taxable capital gain”) realized
by it in that year. Subject to and in accordance with the provisions of the Tax Act, a Canadian Holder must deduct one-half of the amount
of any capital loss (an “allowable capital loss”) realized in a taxation year from taxable capital gains realized by
the Canadian Holder in that year, and any excess may be carried back to any of the three preceding taxation years or carried forward to
any subsequent taxation year and deducted against net taxable capital gains realized in such years.
The amount of a capital loss realized on the disposition
of Shares by a Canadian Holder that is a corporation may, to the extent and under the circumstances specified in the Tax Act, be reduced
by the amount of dividends received or deemed to be received on Shares (including any dividends deemed to be received as a result of the
sale of Shares to illumin pursuant to the Offer). Similar rules may apply where Shares are owned by a partnership or trust of which a
corporation, trust or partnership is a member or beneficiary. Canadian Holders who may be affected by these rules are urged to consult
with their own tax advisors in this regard.
Special rules may apply to suspend or deny, as
applicable, any capital loss realized by a Canadian Holder on the disposition of Shares pursuant to the Offer if the Canadian Holder (or
a person affiliated with the Canadian Holder for purposes of the Tax Act) acquires additional Shares in the period commencing 30 days
prior to, and ending 30 days after, the disposition, and such acquired Shares are owned by such Canadian Holder (or a person affiliated
with the Canadian Holder for purposes of the Tax Act) at the end of such period. Canadian Holders who may be affected by these rules are
urged to consult their own tax advisors.
A Canadian Holder that is a “Canadian-controlled
private corporation” (as defined in the Tax Act) throughout the year may be liable to pay an additional tax (refundable in certain
circumstances) on its “aggregate investment income” for the year, which is defined to include an amount in respect of taxable
capital gains (but not dividends, or deemed dividends, that are deductible in computing taxable income). Tax Proposals announced by the
Minister of Finance (Canada) on April 7, 2022, propose to extend this additional tax to “substantive CCPCs”, as defined in
the Tax Proposals. Canadian Holders who may be affected by these rules are urged to consult with their own tax advisors in this regard.
Alternative Minimum Tax
A capital gain realized or a dividend deemed to
be received by a Canadian Holder who is an individual, including a trust (other than certain specified trusts), as a result of the sale
of Shares pursuant to the Offer may give rise to a liability for alternative minimum tax. Such Canadian Holders should consult their own
tax advisors with respect to the alternative minimum tax rules set out in the Tax Act.
Shareholders Not Resident in Canada
The following portion of the summary is, subject
to the discussion under “General” above, applicable to a Shareholder who, for purposes of the Tax Act and at all relevant
times, (i) is not, and is not deemed to be, resident in Canada, (ii) does not use or hold, and is not deemed to use or hold, its Shares
in connection with carrying on a business in Canada, (iii) deals at arm’s length with, and is not affiliated with, illumin, and
(iv) is not an insurer that carries on an insurance business in Canada and elsewhere (a “Non-Canadian Holder”).
A Non-Canadian Holder who sells Shares to illumin
pursuant to the Offer will be deemed to receive a dividend equal to the excess, if any, of the amount paid by illumin for Shares over
the paid-up capital of such Shares for purposes of the Tax Act. The Corporation estimates that the paid-up capital per Share on the date
hereof is approximately $2.30 (and, following the Expiration Date, illumin will advise Shareholders of any material change to this estimate).
The exact quantum of the deemed dividend, if any, cannot be guaranteed.
Any dividend deemed to be received by a Non-Canadian
Holder will be subject to Canadian withholding tax at a rate of 25% or such lower rate as may be substantiated under the terms of an applicable
tax treaty. For example, a dividend received or deemed to be received by a Non- Canadian Holder that is a resident of the United States
for the purposes of the Canada-United States Income Tax Convention (the “U.S. Treaty”), is fully entitled to benefits
under the U.S. Treaty, and is the beneficial owner of such dividends will generally be subject to withholding tax at a treaty-reduced
rate of 15% (or 5% if the beneficial owner of such dividends is a company that owns at least 10% of Shares).
In view of the potential deemed dividend tax
treatment described above on a sale of Shares pursuant to the Offer and the resulting Canadian withholding tax, Non-Canadian Holders who
wish to sell their Shares should consult their own tax advisors regarding selling their Shares in the market as an alternative to selling
Shares pursuant to the Offer.
The amount paid by illumin pursuant to the Offer
for Shares less any amount deemed to be received by the Non-Canadian Holder as a dividend will be treated as proceeds of disposition of
Shares. A Non-Canadian Holder will not be subject to tax under the Tax Act on any capital gain realized on the disposition of Shares pursuant
to the Offer unless Shares are “taxable Canadian property” to the Non-Canadian Holder for purposes of the Tax Act and Shares
are not “treaty-protected property” of the Non-Canadian Holder for purposes of the Tax Act at the time of disposition.
Generally, Shares will not constitute taxable
Canadian property to a Non-Canadian Holder at the time of disposition provided that Shares are listed at that time on a designated stock
exchange for purposes of the Tax Act (which currently includes the TSX and Nasdaq), unless at any particular time during the 60-month
period that ends at that time: (i) one or any combination of (a) the Non-Canadian Holder, (b) persons with whom the Non-Canadian Holder
does not deal at arm’s length, and (c) partnerships in which the Non-Canadian Holder or a person described in (b) holds a membership
interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of the
capital stock of illumin; and (ii) more than 50% of the fair market value of Shares was derived directly or indirectly from one or any
combination of (a) real or immovable property situated in Canada, (b) “Canadian resource properties” (as defined in the Tax
Act), (c) “timber resource properties” (as defined in the Tax Act), and (d) options in respect of, or interests in, or for
civil law rights in, property described in any of the foregoing whether or not the property exists. Notwithstanding the foregoing, in
certain circumstances set out in the Tax Act, Shares could be deemed to be taxable Canadian property.
Even if Shares are taxable Canadian property to
a Non-Canadian Holder, a taxable capital gain resulting from the disposition of Shares will not be included in computing the Non-Canadian
Holder’s taxable income earned in Canada for purposes of the Tax Act if, at the time of the disposition, Shares constitute treaty
protected property of the Non-Canadian Holder for purposes of the Tax Act at the time of the disposition. Shares will generally be considered
treaty-protected property of a Non-Canadian Holder for purposes of the Tax Act at the time of the disposition if the gain from their disposition
would, because of an applicable income tax treaty between Canada and the country in which the Non-Canadian Holder is resident for purposes
of such treaty and in respect of Non-Canadian Holder the Non-Canadian Holder is entitled to receive benefits thereunder, be exempt from
tax under the Tax Act.
In the event that Shares are considered to be
taxable Canadian property but not treaty-protected property, such Non-Canadian Holder will generally realize a capital gain (or capital
loss) as if the Non-Canadian Holder were resident in Canada, as described above under “Shareholders Resident in Canada –
Disposition of Shares and Deemed Dividend” and “Shareholders Resident in Canada – Taxation of Capital Gains and
Losses”.
Non-Canadian Holders whose Shares are or may
be taxable Canadian property should consult their own advisors for advice having regard to their particular circumstances, including whether
their Shares constitute treaty-protected property.
| 12.2 | Certain United States Federal Income Tax Considerations to United States Holders |
The following is a general summary of certain
material United States federal income tax consequences generally applicable to a beneficial owner of Shares that is a United States Holder
(as defined below) and that properly tenders and sells Shares to illumin pursuant to the Offer. This summary is based on the Code, the
Treasury regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect on the date hereof
and all of which are subject to change, possibly with retroactive effect, so as to result in United States federal income tax consequences
that are materially different from those discussed below. We have not requested and will not request a ruling from the IRS with respect
to any of the United States federal income tax consequences described below or any part of the Offer. The IRS may disagree with and challenge
any of the conclusions reached herein, and a court may sustain such position.
The summary applies only to United States Holders
that hold their Shares as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment) and
does not purport to address all aspects of United States federal income taxation that may be relevant to particular United States Holders
in light of their particular circumstances. Specifically, the summary does not address the United States federal income tax consequences
to certain types of United States Holders subject to special treatment under the Code (including, but not limited to, banks and other
financial institutions, regulated investment companies, real estate investment trusts, tax-exempt entities, private foundations, charitable
remainder trusts, insurance companies, persons holding Shares as part of a hedging, integrated or conversion transaction, constructive
sale, “straddle” or other risk reduction strategy, persons that hold Shares as part of a “wash sale,” persons
who acquired Shares through the exercise or cancellation of employee stock options or otherwise as compensation for their services, United
States expatriates and former citizens or long-term residents of the United States, persons subject to the alternative minimum tax, brokers,
dealers or traders in securities or currencies, traders that elect mark-to-market treatment for their securities, investors that are subject
to the “applicable financial statement” rules under Section 451(b) of the Code, personal holding companies, “S”
corporations, tax-qualified retirement plans, holders whose functional currency is not the United States dollar, persons that own an interest
in a partnership or other pass-through entity that holds Shares, and persons that own, or are deemed to own for United States federal
income tax purposes 10% or more of the voting shares or value of illumin).
This summary does not address the United States
federal income tax consequences of the conversion or exercise of Options. Holders of Options are urged to seek tax advice from their own
tax advisors in this regard.
In addition, this summary does not discuss any
aspect of United States state and local tax laws or non-United States tax laws that may be applicable to any Shareholder, or any United
States federal tax considerations other than United States federal income tax considerations, such as estate and gift tax laws.
For purposes of this summary, a “United
States Holder” is (i) an individual citizen or resident of the United States, as determined for United States federal income
tax purposes, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized
under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate, the income of which is subject
to United States federal income taxation regardless of its source, or (iv) a trust (A) if a court within the United States is able to
exercise primary supervision over its administration and one or more United States persons, as defined under Section 7701(a)(30) of the
Code, have authority to control all substantial decisions of the trust or (B) that has a valid election in effect under applicable Treasury
regulations to be treated as a United States person.
The tax treatment of a partner in a partnership,
or other entity treated as a partnership for United States federal income tax purposes, will generally depend on the status of the partner
and the activities of the partnership. Partnerships tendering Shares and persons holding beneficial interests in Shares through a partnership
are urged to consult their own tax advisors.
This summary is of a general nature only. It
is not intended to constitute, and should not be construed to constitute, legal or tax advice to any particular United States Holder.
United States Holders are urged to consult their own tax advisors as to the specific tax consequences of the Offer to them in light of
their particular circumstances, including tax return reporting requirements, the applicability and effect of United States federal, state,
local and any non-United States tax laws, and the effect of any proposed changes in applicable tax laws.
General
A United States Holder’s exchange of Shares
for cash pursuant to the Offer generally will be a taxable transaction for United States federal income tax purposes. As discussed below,
the United States federal income tax consequences to a United States Holder may vary depending upon the United States Holder’s particular
facts and circumstances. In particular, whether the exchange is properly treated as a sale or exchange or a distribution will depend on
the facts applicable to a United States Holder’s particular situation. Accordingly, United States Holders should consult their own
tax advisors as to the United States federal income tax consequences to them of participating in the Offer.
Treatment as a Sale or Exchange
Under Section 302 of the Code, a transfer of Shares
to illumin by a United States Holder pursuant to the Offer will, as a general rule, be treated as a sale or exchange of Shares for United
States federal income tax purposes only if the receipt of cash upon the sale (a) is “substantially disproportionate” with
respect to the United States Holder, (b) results in a “complete redemption” of the United States Holder’s interest in
illumin or (c) is “not essentially equivalent to a dividend” with respect to the United States Holder. These tests (the “Section
302 tests”) are explained more fully below.
If any of the Section 302 tests is satisfied,
a tendering United States Holder will recognize gain or loss equal to the difference between the amount realized (generally determined
as described below and before any withholding tax) by the United States Holder pursuant to the Offer and the United States Holder’s
tax basis in Shares sold pursuant to the Offer. Generally, a United States Holder’s tax basis in Shares will be equal to the cost
of Shares to the United States Holder reduced (but not below zero) by any previous returns of capital. Subject to the discussion of the
passive foreign investment company (“PFIC”) rules below, the gain or loss will be a capital gain or loss, which will
be a long-term capital gain or loss if Shares have been held for more than one year. Currently, the maximum long-term capital gain rate
for non-corporate United States Holders, including individual United States Holders, is 20%. Certain limitations apply to the deductibility
of capital losses by United States Holders. A United States Holder holding more than one block of Shares (generally, those acquired at
the same cost in a single transaction) can choose the tax basis and holding period of the stock redeemed by adequately identifying the
tendered Shares. Absent such an identification, Shares earliest acquired by the United States Holder among such United States Holder’s
total ownership will be those considered tendered pursuant to the Offer. United States Holders holding more than one block of Shares are
urged to consult their own tax advisors regarding the process to adequately identify tendered Shares.
Treatment as a Distribution
If none of the Section 302 tests is satisfied,
the full amount received by the United States Holder with respect to the purchase of Shares pursuant to the Offer will be treated as a
distribution by illumin in respect of such United States Holder’s Shares. Subject to the discussion of the PFIC rules below, this
distribution will be treated as a dividend to the United States Holder to the extent of the United States Holder’s share of illumin’s
current and accumulated earnings and profits, if any, as determined under United States federal income tax principles. Assuming that illumin
is not a PFIC in the current or a prior taxable year and subject to certain requirements (including certain holding period requirements),
such dividends received by non-corporate United States Holders, including individual United States Holders, are generally taxable as “qualified
dividend income” at a maximum tax rate of 20%. To the extent that the amount received by a United States Holder exceeds the United
States Holder’s share of illumin’s current and accumulated earnings and profits, the excess first will be treated as a tax-free
return of capital to the extent of the United States Holder’s tax basis in its Shares and the United States Holder’s tax basis
in its Shares will be reduced (but not below zero) by such excess. Any remainder will be treated as capital gain from the sale of Shares.
The Corporation does not currently expect to calculate its earnings and profits under United States federal income tax principles and
cannot provide United States Holders with such information. Therefore, United States Holders should expect the entire amount received
pursuant to the Offer to be treated as a dividend if such amount is treated as a distribution as described above.
If, with respect to a United States Holder, the
tender and sale of Shares pursuant to the Offer is treated as a distribution by illumin with respect to such United States Holder’s
Shares, such United States Holder’s adjusted tax basis in its remaining Shares generally will be increased by such United States
Holder’s adjusted tax basis in Shares tendered and sold pursuant to the Offer and will be decreased by any portion of such United
States Holder’s proceeds from the Offer that are treated as a tax-free return of capital as described above. A dividend received
by a corporate United States Holder may be subject to certain special rules for “extraordinary dividends”. No assurance can
be given that any of the Section 302 tests (discussed below) will be satisfied as to any particular United States Holder, and thus no
assurance can be given that any particular United States Holder will not be treated as having received a dividend for United States federal
income tax purposes.
Constructive Ownership of Shares
In determining whether any of the Section 302
tests is satisfied, a United States Holder must take into account not only Shares actually owned by the United States Holder, but also
Shares that are constructively owned by the United States Holder pursuant to Section 318 of the Code. Under Section 318 of the Code, a
United States Holder may constructively own Shares actually owned, and in some cases constructively owned, by certain related individuals
and certain entities in which the United States Holder has an interest or that have an interest in the United States Holder, as well as
any Shares the United States Holder has a right to acquire by exercise of an option, or by the conversion or exchange of a security.
The Section 302 Tests
One of the following tests must be satisfied in
order for the sale of Shares pursuant to the Offer to be treated as a sale or exchange rather than as a distribution for United States
federal income tax purposes. United States Holders are urged to consult their own tax advisors concerning the application of the Section
302 tests to their particular circumstances.
| (a) | “Substantially Disproportionate” Test – The receipt of cash by a United States Holder
will have the effect of a “substantially disproportionate” distribution by illumin with respect to the United States Holder
if the percentage of the outstanding voting shares of illumin actually and constructively owned by the United States Holder immediately
following the sale of Shares pursuant to the Offer (treating Shares purchased pursuant to the Offer as not outstanding) is less than 80%
of the percentage of the outstanding voting shares of illumin actually and constructively owned by the United States Holder immediately
before the exchange (treating Shares purchased by illumin pursuant to the Offer as outstanding). |
| (b) | “Complete Redemption” Test – The receipt of cash by a United States Holder will be treated
as a complete redemption of a United States Holder’s equity interest in illumin if either (i) all Shares actually and constructively
owned by the United States Holder are sold pursuant to the Offer, or (ii) all Shares actually owned by the United States Holder are sold
pursuant to the Offer and the United States Holder is eligible to waive, and effectively waives, the attribution of all shares of illumin
constructively owned by the United States Holder in accordance with the procedures described in Section 302(c)(2) of the Code and the
Treasury regulations promulgated thereunder. |
| (c) | “Not Essentially Equivalent to a Dividend” Test – The receipt of cash by a United States
Holder will generally be treated as “not essentially equivalent to a dividend” if the United States Holder’s sale of
Shares pursuant to the Offer results in a “meaningful reduction” of the United States Holder’s proportionate interest
in illumin. Whether the receipt of cash by the United States Holder will be treated as not essentially equivalent to a dividend will depend
on the particular facts and circumstances, including the number of Shares purchased by illumin pursuant to the Offer. However, in certain
circumstances, in the case of a United States Holder holding a small minority interest in Shares, it is possible that even a small reduction
in such interest may be treated as a “meaningful reduction,” and thus may satisfy the “not essentially equivalent to
a dividend” test. The IRS has ruled that a small reduction by a minority shareholder whose relative stock interest is minimal and
who exercises no control over the affairs of the corporation will meet this test. United States Holders are urged to consult their own
tax advisors concerning the application of the “not essentially equivalent to a dividend” test to their particular circumstances. |
Under certain circumstances, it may be possible
for a tendering United States Holder to satisfy one of the Section 302 tests by contemporaneously selling or otherwise disposing of all
or some Shares that are actually or constructively owned by the United States Holder but that are not purchased pursuant to the Offer.
Correspondingly, a United States Holder may fail to satisfy any of the Section 302 tests because of contemporaneous acquisitions of Shares
by the United States Holder or by a related party whose Shares are constructively owned by the United States Holder. United States Holders
are urged to consult their own tax advisors regarding the consequences of such sales or acquisitions in their particular circumstances.
We cannot predict whether or the extent to which
the Offer will be over-subscribed. If the Offer is oversubscribed, illumin’s purchase of Shares tendered may be prorated. Thus,
even if all Shares actually and constructively owned by a United States Holder are tendered, it is possible that not all Shares will be
purchased by illumin, which in turn may affect the United States Holder’s United States federal income tax consequences, in particular,
the United States Holder’s ability to satisfy one of the Section 302 tests described above.
Passive Foreign Investment Company
Special United States federal income tax rules
apply to United States Holders owning stock of a PFIC. A foreign corporation will be considered a PFIC for any taxable year in which (i)
75% or more of its gross income is passive income, or (ii) 50% or more of the value (determined on the basis of a quarterly average) of
its assets are considered “passive assets” (generally, assets that generate passive income).
The Corporation does not believe that it is, or
has been at any time since its public offering, a PFIC for United States federal income tax purposes, but this conclusion depends on complex
factual determinations that are made annually (including the fair market value of our assets, which may fluctuate substantially due to
changes in our market capitalization and share price, and our spending schedule for our cash balances) and thus there can be no assurance
that illumin is not and has not been a PFIC. If illumin were to be treated as a PFIC at any time during a United States Holder’s
holding period in a Share, gain realized on the sale or other disposition of such Share would in general not be treated as capital gain.
Instead, unless a United States Holder makes, or has made, certain elections with respect to such United States Holder’s Shares,
such United States Holder would be treated as if it had realized such gain and certain “excess distributions” ratably over
its holding period for Shares. If illumin were to be treated as a PFIC, the amounts allocable to the taxable year of the sale or other
disposition of Shares and to any taxable year in such United States Holder’s holding period for Shares before illumin became a PFIC
would be taxable as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate on ordinary
income in effect for individuals or corporations, as appropriate for that taxable year, and an interest charge would be imposed on the
resulting tax liability. With certain exceptions, a United States Holder’s Shares will be treated as stock in a PFIC if illumin
were a PFIC at any time during such United States Holder’s holding period in its Shares. Dividends received by a United States Holder
from illumin will not be eligible for the tax rates applicable to “qualified dividend income” if illumin is treated as a PFIC
with respect to such United States Holder either in the taxable year of the distribution or the preceding taxable year, but instead will
be taxable at rates applicable to ordinary income.
The rules dealing with PFICs and associated
elections are very complex and are affected by various factors in addition to those described above. United States Holders are urged to
consult their own tax advisors regarding the adverse United States federal income tax consequences of owning stock of a PFIC and of making
certain elections designed to lessen those adverse consequences.
Foreign Tax Credit
A United States Holder may be subject to Canadian
withholding tax on certain of the amounts to be paid to such holder in connection with the Offer. See “Certain Canadian Federal
Income Tax Considerations – Shareholders Not Resident in Canada,” above. The amount subject to Canadian withholding
tax may be greater than the amount of gain actually recognized by such holder for United States federal income tax purposes. The ability
of a United States Holder to claim a foreign tax credit with respect to any Canadian taxes withheld on amounts received pursuant to the
Offer is subject to complex limitations, including the general limitation that the credit cannot exceed the proportionate share of a United
States Holder’s United States federal income tax liability that such United States Holder’s “foreign source” taxable
income bears to such United States Holder’s worldwide taxable income. In general, for United States foreign tax credit limitation
purposes, amounts that are treated as dividends paid by illumin will be treated as foreign source income, but amounts received by a United
States Holder that are treated as gains from a sale or exchange of Shares generally will be treated as income from sources within the
United States. Accordingly, the ability of a United States Holder to obtain a foreign tax credit in respect of amounts treated as gains
from the sale or exchange of Shares may require that such United States Holder qualify for the full benefits of the U.S. Treaty and properly
make an election pursuant to the U.S. Treaty and the Code pursuant to which such gains would be treated as foreign source income for United
States federal income tax purposes. The application of this election in connection with the Offer is subject to uncertainty.
Even if a United States Holder makes such an election,
the ability of such holder to obtain a foreign tax credit with respect to Canadian taxes withheld in connection with the Offer will remain
subject to a number of complex limitations provided in the Code and Treasury regulations. The limitation on foreign taxes eligible for
credit is calculated separately with respect to specific classes of income. For this purpose, amounts treated as dividends with respect
to the Offer generally will constitute “passive category income.” The rules governing the foreign tax credit are complex.
United States Holders are urged to consult their own United States tax advisors regarding the availability of the foreign tax credit under
their particular circumstances.
Additional Tax on Investment Income
United States Holders who are individuals, estates,
or trusts and whose income exceeds certain thresholds will be required to pay (in addition to other United States federal income tax)
a 3.8% tax on net investment income, including dividends and gains from the sale or other taxable disposition of Shares. United States
Holders are urged to consult their own tax advisors regarding whether this tax will apply to them.
Information Reporting and Backup Withholding
A United States Holder that is considered a “significant
holder” within the meaning of U.S. Treasury regulation Section 1.302-2(b) may be required to comply with the reporting requirements
of such regulation. Proceeds from the sale of Shares pursuant to the Offer will generally be subject to information reporting to the IRS.
A United States Holder may be subject to backup withholding tax (at a rate of 24%) with respect to payments made to it unless the United
States Holder provides an accurate taxpayer identification number and certifies, among other things, that such number is correct. Backup
withholding is not an additional tax. The amount of any backup withholding collected will be allowed as a refund or credit against the
United States Holder’s United States federal income tax liability, provided that the required information is furnished to the IRS
in a timely manner.
| 13. | Legal Matters and Regulatory Approvals |
The Corporation is not aware of any license or
regulatory permit that is material to the Corporation’s business that might be adversely affected by the Corporation’s acquisition
of Shares pursuant to the Offer or, except as noted below, of any approval or other action by any government or governmental, administrative
or regulatory authority or agency in any jurisdiction, that would be required for the acquisition or ownership of Shares by the Corporation
pursuant to the Offer and that has not been obtained on or before the date hereof. Should any such approval or other action be required,
the Corporation currently contemplates that such approval will be sought or other action will be taken. The Corporation cannot predict
whether it may determine that it must delay the acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of
any such matter.
There can be no assurance that any such approval
or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the Corporation’s business. The Corporation is relying on the
“liquid market exemption” specified in MI 61-101. Accordingly, the valuation requirements of securities regulatory authorities
in Canada applicable to issuer bids generally are not applicable in connection with the Offer.
The Corporation’s obligations under the
Offer to take up and pay for Shares are subject to certain other conditions. See “Offer to Purchase – Conditions of the Offer”.
Assuming that the Offer is fully subscribed, the
value of Shares purchased in the Offer will be $40,000,000. The Corporation intends to fund any purchases of Shares pursuant to the Offer
from cash on hand. The Offer is not conditional on the receipt of financing.
Canaccord Genuity and Canaccord Genuity US have
been retained to serve as dealer managers in Canada and the United States, respectively. Canaccord Genuity has also been retained as the
Corporation’s financial advisor in connection with the Offer. The Dealer Managers may communicate with investment dealers, stock
brokers, commercial banks, trust companies and dealers with respect to the Offer.
Canaccord Genuity and Canaccord Genuity US and
their respective affiliates have provided, and may in the future provide, various investment banking, commercial banking and other services
to us, for which they have received, or we expect they will receive, customary compensation from us.
In the ordinary course of business, including
in their trading and brokerage operations and in a fiduciary capacity, the Dealer Managers and their respective affiliates may hold positions,
both long and short, for their own accounts and for those of their customers, in our securities. The Dealer Managers may from time to
time hold Shares in their proprietary accounts, and, to the extent they own Shares in these accounts at the time of the Offer, the Dealer
Managers may tender Shares pursuant to the Offer.
The Corporation has appointed TSX Trust Company
to act as a depositary for, among other things, (i) the receipt of certificates and/or DRS representing Shares and related Letters of
Transmittal tendered under the Offer, (ii) the receipt of Notices of Guaranteed Delivery delivered pursuant to the procedures for guaranteed
delivery set forth under “Offer to Purchase – Procedure for Tendering Shares”, (iii) the receipt from the Corporation
of cash to be paid in consideration of Shares acquired by the Corporation under the Offer, as agent for the tendering Shareholders, and
(iv) the transmittal of such cash to the tendering Shareholders, as agent for the tendering Shareholders. The Depositary may contact Shareholders
by mail, telephone or facsimile and may request brokers, dealers and other nominee Shareholders to forward materials relating to the Offer
to beneficial owners.
Canaccord Genuity will receive fees from illumin
for its services as dealer manager in Canada, financial advisor and provider of the Liquidity Opinion, and Canaccord Genuity US will receive
fees from illumin for its services as dealer manager in the United States. The Corporation has agreed to reimburse the Dealer Managers
for certain reasonable out-of-pocket expenses incurred in connection with the Offer and to indemnify the Dealer Managers against certain
liabilities to which they may become subject as a result of their engagement as dealer managers and financial advisor, as applicable,
including liabilities under applicable securities law. The fees paid to Canaccord Genuity for its services in providing the Liquidity
Opinion are not contingent upon the conclusions reached by Canaccord Genuity in the Liquidity Opinion.
The Corporation has retained TSX Trust Company
to act as the depositary in connection with the Offer. The Depositary will receive reasonable and customary compensation for its services,
will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection
with the Offer, including certain liabilities under Canadian provincial securities laws.
The Corporation will not pay any fees or commissions
to any stock broker or dealer or any other person for soliciting deposits of Shares pursuant to the Offer. Stock brokers, dealers, commercial
bankers and trust companies will, upon request, be reimbursed by illumin for reasonable and necessary costs and expenses incurred by them
in forwarding materials to their customers.
The Corporation expects to incur expenses of approximately
$650,000 in connection with the Offer, which includes filing fees, dealer manager fees, the fees for the Liquidity Opinion, legal, translation,
accounting, summary advertisement, depositary and printing fees.
Securities legislation in the provinces and territories
of Canada provides security holders of the offeree issuer with, in addition to any other rights they may have at law, one or more rights
of rescission, price revision or to damages if there is a misrepresentation in a circular or notice that is required to be delivered to
Shareholders. However, such rights must be exercised within prescribed time limits. Security holders should refer to the applicable provisions
of the securities legislation of their province or territory for particulars of those rights or consult with a lawyer.
APPROVAL
AND CERTIFICATE
July 27, 2023
The Board of Directors of illumin Holdings Inc.
has approved the contents of the Offer to Purchase and the accompanying Issuer Bid Circular dated July 27, 2023 and the sending, communication
or delivery thereof to the holders of its common shares. The foregoing contains no untrue statement of a material fact and does not omit
to state a material fact that is required to be stated or that is necessary to make a statement not misleading in the light of the circumstances
in which it was made.
|
(signed) “Tal Hayek”
Chief Executive Officer |
|
(signed) “Elliot Muchnik”
Chief Financial Officer |
| |
|
|
| On behalf of the Board of Directors |
| |
|
|
|
(signed) “Sheldon Pollack”
Director |
|
(signed) “Igal Mayer”
Director |
CONSENT
OF CANACCORD GENUITY CORP.
To: The Board of Directors of illumin Holdings
Inc.
We consent to the inclusion of our name and the
reference to our Liquidity Opinion dated July 26, 2023 in the section titled “Purpose and Effect of the Offer – Liquidity
of Market” in the Issuer Bid Circular dated July 27, 2023 of illumin Holdings Inc. in connection with its offer to the holders of
its common shares, and the inclusion of the text of our opinion in Schedule A thereof. Our Liquidity Opinion was given as at July 26,
2023 and remains subject to the assumptions, qualifications and limitations contained therein. In providing our consent, we do not intend
that any person other than the directors of illumin Holdings Inc. will be entitled to rely upon our opinion.
July 27, 2023
(signed) “Canaccord Genuity Corp.”
SCHEDULE
A
LIQUIDITY OPINION OF CANACCORD GENUITY CORP.
See attached.
|
|
Canaccord Genuity Corp.
40 Temperance Street, Suite 2100
Toronto, ON
Canada M5H 0B4
T: 416.869.7368
TF: 1.800.382.9280
cgf.com |
July 26, 2023
illumin Holdings, Inc.
70 University Ave, Suite 1200
Toronto, Ontario, M5V 2Z2
Re: Liquidity Opinion of Canaccord Genuity
To the Board of Directors:
Canaccord Genuity Corp. (“Canaccord Genuity”, “we”
or “us”) understands that illumin Holdings Inc., (the “Issuer”) is considering undertaking a substantial
issuer bid (the “Offer”) to purchase for cash a number of common shares (“Common Shares”) of the
Issuer for an aggregate purchase price not exceeding C$40,000,000. The purchase price of the Common Shares taken up by the Issuer
under the Offer will be determined in the manner described in the Offer to Purchase (defined below) but will not be less than C$2.53 and
not more than C$2.65 per Common Share. We understand that the Offer will constitute an “issuer bid” for purposes of National
Instrument 62-104 Take-Over Bids and Issuer Bids of the Canadian Securities Administrators (“NI 62-104”). Canaccord
Genuity understands that the terms and conditions of the Offer will be set forth in an offer to purchase and issuer bid circular to be
dated July 27, 2023 and mailed to the holders of the Common Shares in connection with the Offer (the “Offer to Purchase”).
The terms used herein which are used or defined in the Offer to Purchase and not otherwise defined herein will have the same meaning as
used in the Offer to Purchase.
Canaccord Genuity has been retained by the Issuer to prepare and deliver
to the Board of Directors of the Issuer (the “Board”) an opinion (the “Liquidity Opinion”) as to
whether, as of the date hereof, (i) a liquid market (as such term is used in Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions of the Canadian Securities Administrators (“MI 61-101”)) for the Common
Shares exists, and (ii) it is reasonable for the Board to conclude that, following the completion of the Offer, there will be a market
for holders of the Common Shares who do not tender to the Offer that is not materially less liquid than the market that existed at the
time of the making of the Offer. We understand that the Board has sought the Liquidity Opinion from Canaccord Genuity as a basis for relying
on an exemption from the requirement to obtain a formal valuation in respect of the Common Shares in accordance with MI 61-101.
Engagement
The Issuer engaged Canaccord Genuity as the Issuer’s financial advisor
and, together with Canaccord Genuity’s United States affiliate, as dealer manager of the Offer pursuant to an engagement letter
dated July 25, 2023 (the “Engagement Agreement”). As part of its engagement, Canaccord Genuity has also agreed to render
the Liquidity Opinion. The Engagement Agreement provides that Canaccord Genuity is to be paid a fixed fee for all of its services under
the Engagement Agreement, no part of which is contingent upon the completion or success of the Offer or the conclusions of the Liquidity
Opinion and notwithstanding that the Liquidity Opinion may be subsequently amended, supplemented or withdrawn in accordance with the Engagement
Letter. In addition, Canaccord Genuity is to be reimbursed for its reasonable out-of-pocket expenses and to be indemnified by the Issuer
in certain circumstances as set out in the Engagement Agreement. The fees paid to Canaccord Genuity in connection with the Engagement
Agreement are not financially material to us. Canaccord Genuity consents to: (i) the inclusion of the Liquidity Opinion in its entirety,
and a summary thereof in a form acceptable to Canaccord Genuity, acting reasonably, in the Offer to Purchase to be mailed to holders of
Common Shares and to the filing thereof, as necessary, by the Issuer with the securities commissions or similar regulatory authorities
in Canada: and (ii) the inclusion of references to the Liquidity Opinion, and a summary thereof in a form acceptable to Canaccord Genuity,
acting reasonably, in any press release issued by the Issuer in respect of the Offer.
Credentials of Canaccord Genuity
Canaccord Genuity is an independent Canadian investment dealer providing
investment research, equity sales and trading and investment banking services to a broad range of institutions and corporations. Canaccord
Genuity has participated in a significant number of transactions involving public and private companies in various industry sectors and
has extensive experience in preparing liquidity opinions. The Liquidity Opinion expressed herein represents the opinion of Canaccord Genuity
and its form and content have been approved for release by a committee of its directors and officers, each of whom is experienced in merger,
acquisition, divestiture, opinion, valuation, and capital market matters.
Relationship with Interested Parties
Neither Canaccord Genuity nor any of its affiliates is an “issuer
insider”, “associated entity” or “affiliated entity” (as those terms are defined in MI 61-101) of the Issuer
or any control person of the Issuer, or any person that would reasonably be expected to be a control person of the Issuer upon successful
completion of the Offer (collectively, the “Interested Parties”).
Neither Canaccord Genuity nor any of its affiliates has acted as a lead
or co-lead underwriter or provided any valuation or financial advisory services to an Interested Party within the past two years (other
than pursuant to the Engagement Agreement) or had a material financial interest in any transaction involving an Interested Party. Neither
Canaccord Genuity nor any of its affiliates is a lender of any material amount of indebtedness to any Interested Party.
Neither Canaccord Genuity nor any of its affiliates has a material financial
interest in the completion of the Offer. The fixed fee payable to Canaccord Genuity pursuant to the Engagement Agreement does not depend
in whole or in part on the agreement, arrangement or understanding that gives Canaccord Genuity a financial incentive in respect of the
conclusions reached in the Liquidity Opinion or the outcome of the Offer.
There are currently no understandings, agreements or commitments between
Canaccord Genuity or any of its affiliates with any Interested Party with respect to future business dealings. Canaccord Genuity acts
as a trader and dealer, both as principal and agent, in the financial markets in Canada, the United States and elsewhere and, as such,
may have had and may in the future have positions in the securities of the Company, including the Shares, or any of its associates or
affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or clients for which it received
or may receive compensation. As an investment dealer, Canaccord Genuity conducts research on securities and may, in the ordinary course
of business, provide research reports and investment advice to its clients on investment matters, including with respect to the Company
and the Offer. In addition, Canaccord Genuity and its affiliates may, in the ordinary course of their business, provide other financial
services to the Issuer or any of its associates or affiliates, including potential financial advisory, investment banking and capital
market activities such as raising debt and equity capital.
Scope of Review
In connection with our Liquidity Opinion, we have reviewed and relied upon
(without attempting to independently verify the completeness of or accuracy thereof) or carried out, among other things, the following:
| 1. | information related to the business, operations and financial performance of the Issuer; |
| 2. | the most recent draft of the Offer to Purchase (the “Draft Offer to Purchase”); |
| 3. | the trading activity, volumes, and price history of the Common Shares on the Toronto Stock Exchange (the
“TSX”), the Nasdaq Stock Exchange (the “Nasdaq”) and other alternative trading venues since the
stock’s first public trading day on July 22, 2014 on the TSX Venture Exchange; |
| 4. | the profile of the distribution and ownership of the Common Shares, to the extent publicly disclosed or
provided to us by the Issuer; |
| 5. | the trading activity and volumes of equity securities of other entities listed and traded on the TSX as
we determined necessary in order to provide the Liquidity Opinion; |
| 6. | the number of Common Shares proposed to be purchased under the Offer relative to (i) the total number
of Common Shares issued and outstanding, less (ii) the number of Common Shares beneficially owned, or over which control or direction
was exercised, by related parties of the Company and Common Shares that were not freely tradable (the “public float”); |
| 7. | certain public information with respect to the Issuer and the Common Shares; |
| 8. | the definition of “liquid market” as outlined in MI 61-101 and certain other parameters in
MI 61-101; |
| 9. | certain precedent issuer bids that were considered relevant; |
| 10. | discussions with senior management of the Issuer; and |
| 11. | such other corporate, industry, and financial market information, investigations and analyses as Canaccord
Genuity considered necessary or appropriate in the circumstances. |
Assumptions and Limitations
With the Board’s approval and as provided for in the Engagement Agreement,
Canaccord Genuity has relied upon the completeness, accuracy, and fair presentation of all of the financial (including, without limitation,
the financial statements of the Issuer) and other information, data, advice, opinions, or representations obtained by it from public sources,
senior management of the Issuer, and their consultants and advisors (collectively, the “Information”). The Liquidity
Opinion is conditional upon such completeness, accuracy, and fair presentation of such Information. Subject to the exercise of professional
judgement and except as expressly described herein, we have not attempted to verify independently the completeness, accuracy, or fair
presentation of any of the Information.
Senior officers of the Issuer have represented to Canaccord Genuity in
a certificate delivered as of the date hereof, among other things, that: (i) the Information provided orally by, or in the presence of,
an officer or employee of the Issuer or in writing by the Issuer, any of its affiliates (as such term is defined in NI 62-104) or any
of their respective agents or advisors, for the purpose of preparing the Opinion was at the date provided to Canaccord Genuity, and is
at the date hereof complete, true and correct in all material respects, and did not and does not contain any untrue statement of material
fact, and did not and does not omit to state any material fact necessary to make such Information or any statement contained therein,
not misleading in light of the circumstances under which the Information was provided to Canaccord Genuity; and (ii) since the dates on
which the Information was provided to Canaccord Genuity, except as disclosed in writing to Canaccord Genuity, there has been no material
change or change in material facts, financial or otherwise, which might reasonably be considered material to the Liquidity Opinion.
In preparing the Liquidity Opinion, Canaccord Genuity has made several
assumptions, including that the Offer will be completed in accordance with the terms and conditions of, and substantially within the time
frames specified in, the Draft Offer to Purchase without any waiver or amendment of any material term or condition thereof, that there
will be no significant immediate change in the holdings of the Common Shares other than as a result of the Offer, and that the disclosure
provided or incorporated by reference in the Draft Offer to Purchase with respect to the Issuer, its subsidiaries and affiliates and the
Offer is accurate in all material respects.
The Liquidity Opinion is rendered on the basis of securities markets, economic,
financial and general business conditions prevailing as at the date hereof and conditions affecting the Issuer and the Common Shares at
the date hereof.
The Liquidity Opinion has been provided for the use of the Board in determining
the availability of an exemption from the formal valuation requirements of MI 61-101 and may not be used by any other person or relied
upon by any other person other than the Board without the express prior written consent of Canaccord Genuity. The Liquidity Opinion is
given as of the date hereof and Canaccord Genuity disclaims any undertaking or obligation to advise any person of any change in any fact
or matter affecting the Liquidity Opinion that may come or be brought to Canaccord Genuity’s attention after the date hereof. Without
limiting the foregoing, if there is any material change in any fact or matter affecting the Liquidity Opinion after the date hereof, Canaccord
Genuity reserves the right to change, modify, or withdraw the Liquidity Opinion.
Canaccord Genuity believes that its analyses must be considered as a whole
and that selecting portions of the analyses or the factors considered by it, without considering all factors and analyses together, could
create a misleading view of the process underlying the Liquidity Opinion. The preparation of an opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular
factor or analysis. The Liquidity Opinion is not to be construed as a recommendation to any holder of Common Shares as to whether to tender
their Common Shares to the Offer.
For the purposes of the Liquidity Opinion, the phrase “liquid market”
has the meaning ascribed thereto in paragraph (b) of subsection 1.2(1) of MI 61-101.
Conclusion
Based upon and subject to the foregoing, Canaccord Genuity is of the opinion
that, as of the date hereof: (i) a liquid market for the Common Shares exists; and (ii) it is reasonable to conclude that, following the
completion of the Offer, there will be a market for holders of the Common Shares who do not tender to the Offer that is not materially
less liquid than the market that existed at the time of the making of the Offer.
Yours Very Truly,
Canaccord Genuity Corp.
The Letter of Transmittal, certificates for Shares
and any other required documents must be sent or delivered by each tendering Shareholder or the tendering Shareholder’s broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one of its mailing addresses specified below. Any other questions
or requests may be directed to the Depositary at the email address, facsimile and telephone numbers specified below.
TSX Trust Company
By Mail
301 – 100 Adelaide St W
Toronto, ON M5H 4H1
Attention: Corporate Actions
By Hand, Courier or Registered Mail
301 – 100 Adelaide St W
Toronto, ON M5H 4H1
Attention: Corporate Actions
Inquiries
Telephone: 416-342-1091
Toll Free: 1-866-600-5869
E-mail: tsxtis@tmx.com
| DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. |
| Any questions or requests for assistance may be directed to the Depositary at the addresses and telephone number specified above. Shareholders also may contact their broker, commercial bank, trust company or other nominee for assistance concerning the Offer. Additional copies of the Offer to Purchase and the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Depositary. Manually executed photocopies of the Letter of Transmittal will be accepted. |
The Dealer Managers for the Offer are:
In
Canada:
Canaccord
Genuity Corp.
40
Temperance Street, Suite 2100
Toronto,
Ontario
M5H
0B4
Email:
ecm@cgf.com |
|
In
the United States:
Canaccord
Genuity LLC
99
High Street, 12th Floor
Boston,
MA
02110
Email:
ecm@cgf.com
|
Exhibit (a)(1)(D)
ILLUMIN HOLDINGS INC.
SUPPLEMENT NO. 1
TO THE OFFER TO PURCHASE FOR NOT MORE THAN $40,000,000 UP TO 15,810,276 OF ITS COMMON SHARES AT A PURCHASE PRICE OF NOT LESS THAN $2.53
AND NOT MORE THAN $2.65 PER COMMON SHARE
The date of this Supplement No. 1 to the Offer to Purchase is August
9, 2023
illumin Holdings Inc. (“illumin” or the “Corporation”)
hereby amends and supplements its offer to purchase, dated July 27, 2023 (the “Original Offer to Purchase”, and together
with this supplement, as the same may be further amended or supplemented form time to time, the “Offer to Purchase”),
for cancellation up to 15,810,276 common shares of the Corporation (the “Shares”) for an aggregate purchase price not
exceeding $40,000,000, upon the terms and subject to the conditions described in the Original Offer to Purchase and the accompanying issuer
bid circular (the “Circular”), and the related letter of transmittal (the “Letter of Transmittal”)
and notice of guaranteed delivery (the “Notice of Guaranteed Delivery”). The Original Offer to Purchase is hereby supplemented
by this Supplement No. 1 (this “Supplement No. 1”) (which together with the Original Offer to Purchase, Circular, Letter
of Transmittal and Notice of Guaranteed Delivery, as they may hereafter be amended or supplemented from time to time, constitute the “Offer”),
which contains a description of certain amendments that are being made hereby. Capitalized terms used in this Supplement No. 1 but not
otherwise defined have the meanings ascribed to those terms in the Original Offer to Purchase.
The information, terms and conditions of the Offer set forth in the Original
Offer to Purchase remain applicable in all respects to the Offer, except to the extent modified by this Supplement No. 1. Where information
in the Original Offer to Purchase is in conflict with, is supplemented by or replaced by information in this Supplement No. 1, the information
provided in this Supplement No. 1 shall govern.
GENERAL – DOLLAR AMOUNTS
Shareholders are urged to take note that all dollar references in the Offer
are in Canadian dollars ($) except where otherwise indicated. For greater clarity, dollar references to U.S. dollars are expressed as
“US$”.
GENERAL – NASDAQ DELISTING
Shareholders should note that, regardless of the success of the Offer,
the Corporation also has re-evaluated the continued benefits and costs of its listing on Nasdaq and has concluded that it is appropriate
to delist from Nasdaq as soon as practical following the expiry of the Offer. The Corporation currently expects that the delisting will
be effective prior to the open of trading on September 11, 2023. The Corporation expects that its Shares will be eligible for quotation
on the OTC Markets following such delisting and that U.S. Shareholders should be able to trade in the Shares on both the OTC Markets as
well as the TSX following any such delisting.
OFFER TO PURCHASE – CONDITIONS OF THE OFFER
The lead-in to the first paragraph under the heading “Conditions
of the Offer” of the Offer to Purchase is hereby amended and restated as follows:
“The Offer is not conditional on the receipt
of financing or any minimum number of Shares being tendered. Notwithstanding any other provision of the Offer, illumin shall not be required
to accept for purchase, to purchase or to pay for any Shares tendered, and may withdraw, extend or vary the Offer or may postpone the
acceptance for payment of or the payment for Shares tendered (subject to Exchange Act Rule 13e-4(f)(5), which requires that illumin must
return Shares tendered promptly after termination or withdrawal of the Offer), if, at any time before the Expiration Date, any of the
following events shall have occurred (or shall have been determined by illumin to have occurred) which, in the Corporation’s sole
judgment, acting reasonably, in any such case, makes it inadvisable to proceed with the Offer or with such acceptance for purchase or
payment:”
Condition (c) in the first paragraph under the heading “Conditions
of the Offer” of the Offer to Purchase is hereby amended and restated as follows:
“(c) there shall have occurred (i) any general
suspension of trading in securities on any securities exchange or in the over-the-counter market in Canada or the United States, (ii)
the declaration of a banking moratorium or any suspension of payments in respect of banks in Canada or the United States (whether or not
mandatory), (iii) a natural disaster or the commencement of a war, armed hostilities or other international or national calamity directly
or indirectly involving Canada, the United States, Spain or Mexico, (iv) any limitation by any government or governmental authority or
regulatory or administrative agency or any other event that, in the sole judgment of the Corporation, acting reasonably, might affect
the extension of credit by banks or other lending institutions, (v) any material change in short term or long term interest rates, (vi)
any change in the general political, market, economic or financial conditions (including, without limitation, any change in commodity
prices) that, in our sole judgment, acting reasonably, has or may have a material adverse effect on the Corporation’s business,
operations or prospects or the trading in, or value of, Shares, (vii) any decline in any of the S&P/TSX Composite Index, the Nasdaq
Composite Index, the Dow Jones Industrial Average or the S&P 500 Index by an amount in excess of 10%, measured from the close of business
on July 25, 2023, or (viii) in the case of any of the foregoing existing at the time of the commencement of the Offer, an acceleration
or worsening thereof;”
The second paragraph under the heading “Conditions of the Offer”
of the Offer to Purchase is hereby amended and restated as follows:
“The foregoing conditions are for the sole benefit
of the Corporation and may be asserted by the Corporation, in its sole judgment, acting reasonably, or may be waived by the Corporation,
in its sole judgment, acting reasonably, in whole or in part at any time prior to the Expiration Date, provided that any condition waived
in whole or in part will be waived with respect to all Shares tendered. The waiver of any such right with respect to particular facts
and other circumstances shall not be deemed a waiver with respect to any other facts and circumstances. Any determination by the Corporation
concerning the events described in this Section shall be final and binding on all parties, except as otherwise finally determined by a
court of competent jurisdiction or as required by law.”
OFFER TO PURCHASE – TAKING UP AND PAYMENT FOR
TENDERED SHARES
The third paragraph under the heading “Taking Up and Payment for
Tendered Shares” of the Offer to Purchase is hereby amended and restated as follows:
“The Corporation reserves the right, in its sole
discretion, to delay taking up or paying for any Shares or to terminate the Offer and not take up or pay for any Shares if any event specified
under “Offer to Purchase – Conditions of the Offer” is not satisfied or waived, by giving written notice thereof or
other communication confirmed in writing to the Depositary.”
The ninth paragraph under the heading “Taking Up and Payment for
Tendered Shares” of the Offer to Purchase is hereby amended and restated as follows:
“The settlement with each Shareholder who has
tendered Shares under the Offer will be effected by the Depositary by forwarding a cheque, payable in Canadian dollars, representing the
cash payment (less applicable withholding taxes, if any) for such Shareholder’s Shares taken up under the Offer. The cheque will
be issued in the name of the person signing the Letter of Transmittal or in the name of such other person as specified by the person signing
the Letter of Transmittal by properly completing the appropriate box in such Letter of Transmittal. Unless the tendering Shareholder instructs
the Depositary to hold the cheque for pick-up by checking the appropriate box in the Letter of Transmittal, the cheque will be forwarded
by prepaid mail to the payee at the address specified in the Letter of Transmittal. If no such delivery instructions are specified, the
cheque will be sent to the address of the tendering Shareholder as it appears in the registers maintained in respect of Shares. Cheques
mailed in accordance with this paragraph will be deemed to have been delivered at the time of mailing. Payments will be made net of any
applicable withholding taxes.”
CIRCULAR – BACKGROUND TO THE OFFER
The following paragraph shall be inserted as a new fifth paragraph under
the heading “Background to the Offer” of the Circular:
“Independently of its determination to proceed
with the Offer, the Corporation also has re-evaluated the continued benefits and costs of its listing on Nasdaq and has concluded that
it is appropriate to delist from Nasdaq as soon as practical following the expiry of the Offer. The decision to delist from Nasdaq is
not conditional on the making or the success of the Offer. Accordingly, the Board did not consider the delisting when determining to approve
the Offer other than noting that the Offer provides U.S. Shareholders with an opportunity for liquidity at a premium well in advance of
such delisting from Nasdaq. The Corporation expects that its Shares will be eligible for quotation on the OTC Markets following such delisting
and that U.S. Shareholders should be able to trade in the Shares on both the OTC Markets as well as the TSX following any such delisting,
whether they decide not to tender into the Offer or whether they tender but remain Shareholders due to pro ration if the Offer is oversubscribed.”
Factor (c) under the existing fifth paragraph
under the heading “Background to the Offer” of the Circular is hereby amended and restated as follows:
“(c) the financial advice of Canaccord Genuity
as to the proposed timing and structure of the Offer, including observations regarding the prevalence of “Dutch auction” structures
for substantial issuer bids amongst North American issuers, and typical pricing parameters used in precedent transactions;”
The Offer to Purchase and this Supplement contain important information
which should be read carefully before any decision is made with respect to the Offer. Any questions or requests for assistance regarding
the Offer or this Supplement may be directed to the Depositary at the addresses and telephone numbers and email specified below. Shareholders
also may contact their broker, commercial bank, trust company or other nominee for assistance concerning the Offer or this Supplement.
Additional copies of the Offer to Purchase and this Supplement, the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be obtained from the Depositary. Manually executed photocopies of the Letter of Transmittal will be accepted.
TSX Trust Company
By Mail
301 – 100 Adelaide St W
Toronto, ON M5H 4H1
Attention: Corporate Actions
By Hand, Courier or Registered Mail
301 – 100 Adelaide St W
Toronto, ON M5H 4H1
Attention: Corporate Actions
Inquiries
Telephone: 416-342-1091
Toll Free: 1-866-600-5869
E-mail: tsxtis@tmx.com
The Dealer Managers for the Offer are:
In Canada:
Canaccord Genuity Corp.
40 Temperance Street, Suite 2100
Toronto, Ontario
M5H 0B4
Email: ecm@cgf.com |
|
In
the United States:
Canaccord Genuity LLC
99 High Street, 12th Floor
Boston, MA
02110
Email: ecm@cgf.com
|
4
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