Company release March 22, 2018 at 3:30 PM EET
Notice Convening the 2018 Annual General Meeting of FIT Biotech Oy
The shareholders of FIT Biotech Oy are invited to the Annual General Meeting ("AGM"), which is to be held on Thursday April 12, 2018 starting at 10:00 am (Finnish time) at Hotel Arthur, street address Vuorikatu 19, 00100 Helsinki, Finland. The reception of persons who have registered for the meeting will begin at 09:30 am.
- Matters on the Agenda of the General Meeting
At the general meeting, the following matters will be considered:
- Opening of the meeting
- Calling the meeting to order
- Election of the persons to scrutinise the minutes and to supervise the counting of votes
- Recording the legality of the meeting
- Recording the attendance at the meeting and adoption of the list of votes
- Presentation of the annual accounts, the report of the Board of Directors and the auditor's report for the year 2017
Review by the CEO
- Adoption of the 2017 financial statements
- Use of the financial result shown on the balance sheet
The Board of Directors proposes that no dividends be distributed for the 2017 financial period and that the financial result of EUR -3 300 763,48 for the financial period be transferred to the profit/loss account.
- Resolution on the discharge of the members of the Board of Directors and the CEO from liability
- Resolution on the remuneration of the members of the Board of Directors
The Board of Directors proposes that the members of the Board be paid the following remuneration for the term ending at the end of the 2019 annual general meeting:
- Chairperson of the Board EUR 3,000 per month
- Other members of the Board (including deputy chairperson, if any) will be paid a monthly compensation of EUR 2,500 for any and all Board work.
- In addition, the Chairperson of the Board and other Board members will be paid for their reasonable travelling expenses to physical Board meetings.
- Resolution on the number of the members of the Board of Directors
The Board of Directors proposes that the number of members of the Board is at least four (4).
- Election of members of the Board of Directors
The Board of Directors proposes that Chitra Bharucha, Anne-Maria Salonius, Eero Rautalahti and Rabbe Slätis be re-elected to the Board. All the candidates have consented to being re-elected.
- Resolution on the remuneration of the auditor
The Board of Directors proposes that the auditors be reimbursed in accordance with the auditors' reasonable invoice approved by the Company.
- Election of the auditor
The Board of Directors proposes that audit firm PricewaterhouseCoopers Oy, which is currently the company's auditor, be re-elected as the auditor. PricewaterhouseCoopers Oy has stated that the responsible auditor is Janne Rajalahti, APA.
- Financing Arrangement between the Company and Sitra and related Board authorizations
The Extraordinary General Meeting ("EGM") held on September 15, 2016 authorised the Board to grant options and other special rights as referred to in Chapter 10, section 1 of the Companies Act. This authorisation was granted in order to implement the convertible note and warrant funding program dated September 26, 2016 with the Finnish innovation fund SITRA ("Sitra"). Under the said authorisation the Board has on September 26, 2016 resolved to approve the subscription agreement with Sitra and to establish corresponding convertible note and share warrants funding program ("Sitra Programme") with Trade Register registration date September 28, 2016.
The EGM held on December 14, 2017 further extended the Board's authorization and allowed the Board to issue and/or deliver a maximum of 20,000,000 old or new Class K shares under the special rights (i.e loan notes with conversion rights) as set out in the Sitra Programme. The number was based on the projections and estimates made by the parties and the price of the Company's K shares in trading at that time.
Subsequent to the aforesaid EGM it has become evident that the authorisation granted is not sufficient due to the declining market value of the Company's Class K shares, which has in turn meant that a higher than anticipated number of Class K shares have to be issued under the convertible notes of the Sitra Programme. There are no changes to the number of share warrants which have all been issued to Sitra in full. The Board believes that the with this authorisation proposed to the AGM the Sitra Programme can be closed, and no further authorisation will be necessary.
Consequently, the Board proposes that the AGM authorises the Board further to grant Sitra special rights as referred to in Chapter 10, section 1 of the Companies Act without regard to the pre-emptive rights of the shareholders, which special rights entitle Sitra to a total maximum number of 300,000,000 new or old K shares by way of converting the remaining loan notes of the Sitra Programme.
The Board is entitled to decide on all other terms and conditions for granting special rights and to amend such terms and conditions. This authorisation is proposed to be in force until further notice. As the matter relates to critical funding needs of the Company and its relationship with a crucial financing party and an existing financing arrangement, the Board deems there are weighty financial grounds for the granting of these special rights and the expansion of the Board's authorisation as described herein.
- Financing Arrangement between the Company and European High Growth Opportunities Securization Fund and related Board authorizations
The EGM held on February 6, 2018 authorised the Board to grant options and other special rights as referred to in Chapter 10, section 1 of the Companies Act. This authorisation was granted in order to approve and implement the "Agreement for the issuance of and subscription to notes convertible into new and/or existing shares and/or partially redeemable in cash with share subscription warrants attached" ("Agreement") between the Company and European High Growth Opportunities Securitization Fund ("EHGOSF"), a fund managed by European High Growth Opportunities Manco SA, member of the Alpha Blue Ocean Investment Group ("ABO") concerning a convertible notes with share subscription warrants attached funding programme of up to EUR 10,000,000 ("ABO Programme"). The Agreement was executed and related company release published on December 23, 2017.
Pursuant to this ABO Programme, convertible notes will be drawn down automatically in 20 sequential tranches of EUR 500,000 so that a tranche will consist of 500 loan notes with a nominal value of EUR 1,000 each ("Tranche"). The convertible notes corresponding to each Tranche drawn will carry the right to be converted into the Company's Class K shares at a fluctuating conversion price depending on the market value of the Company's K shares as detailed in the Agreement. The conversion price used to convert the loan notes is always 85 per cent of the lowest closing price during the period of 15 trading days immediately preceding EHGOSF's notice to convert. The closing price is defined as volume weighted average price ("VWAP"), which is a trading benchmark calculation provided by Bloomberg LP.
Upon the subscription for each Tranche, EHGOSF will also receive share subscription warrants, the number of which depend on then current share price of the Company's K share in trading, and which warrants entitle, but not obligate, it to subscribe for a number of Company's K shares at a fluctuating subscription price which is a function of 110 per cent of the lowest closing VWAP in the 15 trading days immediately preceding the disbursement of the relevant loan notes. Hence the subscription price, similarly as the loan note conversion price, in the end depends on the market value of the K shares.
In accordance with the resolution and authorisation of the EGM the Board has been allowed to issue a maximum of 250,000,000 old or new Class K shares under the convertible notes and a maximum of old or new 250,000,000 Class K shares under the warrants as set out in the ABO Programme.
Subsequent to the aforesaid authorisation by the EGM of February 6, 2018 it has become evident that the maximum number for authorised shares relating to the convertible notes and warrants will have to be exceeded. This is a result of the declining market value of the Company's Class K shares, which has in turn resulted in higher than anticipated number of special rights required to implement the ABO Programme i.e. conversion of the loan notes and required number of share warrants to be delivered to EHGOSF.
In order to correct and rectify this deficiency in the Board authorisation the Board proposes, that the AGM authorises the Board further to grant special rights to EHGOSF entitling to a maximum of 4,000,000,000 new or old Class K shares under the convertible notes of the ABO Programme and 3,000,000,000 new or old Class K shares under the share warrants each without regard to the pre-emptive rights of the shareholders. The Board is therefore authorised also to issue or deliver a maximum of 4,000,000,000 new or old K shares based on the convertible loan notes of the ABO Programme and 3 000,000,000 old of new K shares based on the share warrants. The Board further proposes that the AGM approves the use of treasury shares in the conversion of the loan notes in excess of the amount of 250,000,000 K shares issuable under special rights as initially approved by the EGM of February 6, 2018. As the price of the Company's K shares has been declining in trading the Company has had to exceed this amount in order to comply with and implement the ABO Programme, specifically the loan note conversions. These treasury shares will be delivered to EHGOSF under the authorisation granted by the EGM of December 14, 2017, and total number of treasury shares to be delivered to EHGOSF by way of conversions in excess of the said 250,000,000 K shares is yet unknown and may increase by the time of the AGM. The Board cannot control how and when EHGOSF issues its conversion notices.
The terms and conditions of the convertible notes are detailed in the "Characteristics of the Notes" document initially presented to the EGM of February 6, 2018 and again attached herein as Appendix 1; and the terms and conditions of the share subscription warrants are detailed in the "Characteristic of the Warrants" document similarly presented first to the EGM of February 6, 2018 and again attached herein as Appendix 2.
The final total number of the Company's K shares to be issued or delivered upon conversion of the notes or subscription by virtue of the share warrants will remain unknown and will depend whether the Company's will draw further Tranches as well as on the value of the Company's K share in public trading from time to time. The total number of K shares to be issued or delivered will also depend on EHGOSF's willingness to utilise the share warrants to subscribe for the Company's shares. Therefore, the Board may have to seek further authorisations to implement the ABO Programme.
The Board is entitled to decide on all other terms and conditions for granting special rights and to amend such terms and conditions, and the granting of such rights can be carried out as a directed issue in deviation from the shareholders' pre-emptive right. The Board may use either newly issued shares or existing treasury shares to satisfy any conversion of notes and/or exercise of the share subscription warrants. This authorisation replaces the authorisation granted in the EGM of February 6, 2018, and it is proposed to be valid until further notice.
The purpose of the ABO Programme is to ensure the continuity of the Company's business operations and sufficiency of its working capital in the long-term, and the Board's proposal directly relates to the critical funding needs of the Company and its relationship with a crucial financing party and an existing financing arrangement. The Board therefore deems there are weighty financial grounds for the granting of these special rights and the expansion of the Board's authorisation as described herein.
- Authorizing the Board to issue new Class K Shares or grant Special Rights
The Board proposes that the AGM authorises the Board to resolve upon issuance of Class K shares to (i) the Company itself free of charge as referred to in Chapter 9, section 20 of the Companies Act to be used for purposes the Board deems necessary and appropriate; or (ii) by way of directed issuance of new Class K shares as referred to in Chapter 9, section 4 of the Companies Act in deviation of the pre-emptive rights of the shareholders; as well as (iii) by way of granting of options or other special rights entitling to Class K shares as referred to in Chapter 10, section 1 of the Companies Act.
The Board may use this authorisation for measures required to enhance the general operational conditions of the Company and to ensure the sufficiency of the Company's working capital e.g. by issuing new shares free of charge or against payment, by implementing a share based incentive scheme for its personnel and management, by implementing a new convertible note program and/or share subscription warrant funding programme or by fulfilling its obligations under any existing convertible note and/or share subscription warrant based funding program, such as the ABO Programme. For any directed share issue free of charge, a weighty financial reason for the Company as well as in regard to the interests of the shareholders for such authorisation as prescribed in Chapter 9, section 4 of the Companies Act must be present.
Under the authorisation the Board may issue a maximum of 2,000,000,000 new Class K shares (or distribute or deliver treasure shares in its possession already issued hereunder). The Board would be authorised to resolve upon any other detail of the share issue or distribution and/or options or other special rights. The Board would be authorised to amend also the terms and conditions of any and all special rights so issued.
It is proposed that the authorisation be valid until further notice. This authorisation will replace the authorisation granted in the EGM of December 14, 2017 in which the Board was similarly authorised to issue a maximum of 550,000,000 new Class K shares.
- Closing of the meeting
- Documents of the General Meeting
The proposed resolutions and the financial statements, report of the board of directors and auditor's report of the company are available and have been available on FIT Biotech Oy's website at http://www.fitbiotech.com/investors/shareholder-meetings/ on March 15, 2018 onwards. The proposed resolutions and the other documents mentioned above will also be available at the meeting, and copies of these documents and of this notice will be sent to shareholders upon request. The minutes of the general meeting will be available on the above website as of April 19, 2018 at the latest.
- Instructions for the Participants in the General Meeting
- Shareholders registered in the shareholders' register
- Holders of nominee registered shares
- Proxy representatives and powers of attorney
- Other instructions and information
Each shareholder, who is registered on March 29, 2018, the record date of the meeting, in the company's shareholders' register maintained by Euroclear Finland Ltd, has the right to participate in the annual general meeting. A shareholder whose shares are registered on his/her personal Finnish book-entry account is registered in the shareholders' register of the company.
A shareholder, who wants to participate in the Extraordinary General Meeting of Shareholders, shall register for the meeting no later than April 9, 2018 at 10 am (Finnish time) by giving a prior notice of participation by e-mail to the address email@example.com or by post to the address FIT Biotech Oy/Elisa Piispanen, Biokatu 12, 33520 Tampere, Finland. When giving a prior notice by mail that should arrive before abovementioned deadline.
In connection with the registration, a shareholder shall state his/her name, personal identification number or business identity code, address, telephone number, as well as the names and personal identification numbers of assistants or proxy representatives, if any. The personal data given to FIT Biotech Oy will be used only in connection with the annual general meeting and with the processing of necessary registrations.
Upon request, a shareholder, his/her representative or proxy representative must be able to prove his/her identity and/or representation right at the meeting venue.
A holder of nominee registered shares has the right to participate in the general meeting based on the shares that would entitle him/her to be registered on March 29, 2018 in the shareholders' register maintained by Euroclear Finland Ltd. The right to participate in the general meeting also requires that the shareholder has on the basis of such shares been temporarily registered into the shareholders' register held by Euroclear Finland Ltd at the latest by April 9, 2018 at 10 am (Finnish time). As regards nominee registered shares, this constitutes due registration for the general meeting.
A holder of nominee registered shares is advised to request without delay the necessary instructions regarding registration in the temporary shareholder's register of the company, the issuing of proxy documents and registration for the general meeting from his/her custodian bank. The account operator of the custodian bank has to temporarily register a holder of nominee registered shares who wants to participate in the general meeting into the shareholders' register of the company at the latest by the time stated above.
A shareholder may participate in the general meeting and exercise his/her rights at the meeting by way of proxy representation. A proxy representative must produce a dated proxy document or power of attorney or otherwise in a reliable manner demonstrate his/her right to represent the shareholder at the general meeting. When a shareholder participates in the general meeting by means of several proxy representatives representing the shareholder with shares in different securities accounts, the shares by which each proxy representative represents the shareholder must be identified in connection with registration for the general meeting. Any proxy documents and powers of attorney are requested to be delivered by post to the address FIT Biotech Oy/Elisa Piispanen, Biokatu 12, 33520 Tampere, Finland or by e-mail to the address firstname.lastname@example.org no later than on April 9, 2018 at 10:00 am (Finnish time).
Pursuant to Chapter 5, section 25 of the Limited Liability Companies Act, a shareholder who is present at the general meeting has the right to request information with respect to the matters to be considered at the meeting.
As at the date of the notice convening the general meeting March 22, 2018, FIT Biotech Oy has a total of 909 302 152 shares, which each carry one vote regardless of share class. The shares are divided into classes as follows: 5,229 A shares, 65,235 D shares and 909 231 688 K shares.
Helsinki March 22, 2018
FIT BIOTECH OY
Board of Directors
For further information:
Chairman of the Board of Directors Rabbe Slätis
Tel: +358 40 840 6749
Certified Advisor: Aalto Capital Partners Oy, tel. +358 40 587 7000
About FIT Biotech
FIT Biotech Oy is a biotechnology company established in 1995. The company develops and licenses its patented GTU® (Gene Transport Unit) vector technology for new-generation medical treatments. GTU® is a gene transport technology that meets an important medical challenge in the usability of gene therapy and DNA vaccines.
FIT Biotech applies GTU® technology in its drug development programmes. Application areas include cancer (gene therapy) and infectious diseases such as HIV and tuberculosis, as well as animal vaccines.
FIT Biotech shares are listed on the First North Finland marketplace maintained by Nasdaq Helsinki Oy.
NASDAQ OMX Helsinki