Announcement PDF INVION LIMITED ACN 094 730 417 Notice of General Meeting Explanatory Statement and Proxy Form Date of Meeting: 23 September 2021 Time of Meeting: 12pm (AEST) The meeting will be held at: Level 4, 96-100 Albert Road South Melbourne, VIC 3205 And by teleconference Any shareholders who wish to attend the General Meeting (Meeting) should monitor the Company’s website for any updates about the Meeting. If it becomes necessary or appropriate to make alternative arrangements for the holding or conducting of the Meeting, the Company will make further information available on its website at https://inviongroup.com/. Shareholders are encouraged to lodge their completed proxy forms in accordance with the instructions in this Notice of Meeting. Following recent modifications brought to the Corporations Act 2001, no hard copy of the Notice of General Meeting, Explanatory Statement and Independent Expert’s Report will be circulated. The Notice of Meeting has been given to those entitled to receive by use of one or more technologies. The Notice of Meeting is also available on the Australian Stock Exchange Announcement platform and on the Company’s website at https://inviongroup.com/asxannouncements/ . This Notice of Meeting includes an Independent Expert’s Report in relation to Proposed Transactions (the subject of Resolutions 1 and 2) and the proposed issue of Options to Mr Thian Chew (the subject of Resolution 3). The Independent Expert has concluded that the Proposed Transactions and the proposed issue of Options to Mr Thian Chew are not fair but reasonable to non-associated Shareholders. This Notice of Meeting including the Explanatory Statement and Independent Expert’s Report should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional advisor without delay. INVION LIMITED ACN 094 730 417 Registered office: Level 4, 96-100 Albert Road, South Melbourne, VIC 3205 Dear Shareholders Notice is hereby given that the General Meeting of Shareholders of Invion Limited (the “Company” or “Invion”) will be held at Level 4, 96-100 Albert Road, South Melbourne, VIC 3205 on 23 September 2021 at 12pm (AEST) (“General Meeting” or “Meeting”) as a hybrid meeting. The business of this Meeting is to approve a number of transactions: - Resolution 1: Approval to issue Shares under the Placement to RMW Cho Health Technology Limited; - Resolution 2: Approval to acquire a licence and distribution rights to NGPDT from RMW Cho Group Limited; - Resolution 3: Approval to issue Options to Mr Thian Chew; and - Resolution 4: Approval to issue Options to Mr Alistair Bennallack. Proposed Transactions As announced to the market on 2 June 2021: - Invion entered into a Co-Development Agreement and Exclusive Distribution and Licence Agreement with RMW Cho Group Limited (“RMW”) to, amongst other things, co-develop Next Generation Photo Dynamic Therapy technology (including Photosoft™) (“NGPDT”) for the treatment of atherosclerosis and infectious diseases (including viral, bacterial, fungal and parasitic). Under the Co-Development Agreement and Exclusive Distribution and Licence Agreement, Invion will gain exclusive distribution rights to the NGPDT technology in Asia Pacific 1 for these indications. - Invion entered into a Placement Agreement with RMW Cho Health Technology Limited (“RCHT”), pursuant to which RCHT will provide funding of approximately A$4.5M by way of a placement of fully paid ordinary shares (“Shares”) in Invion at an issue price of A$0.014 per Share (“Placement”), which represents a 2.1% discount to the five-day volume weighted average price as at 2 June 2021, (together, the “Proposed Transactions”). The Placement Agreement, Co-Development Agreement and Exclusive Distribution and Licence Agreement are each subject to, among other things, approval by Shareholders. The purpose of Resolutions 1 and 2 is to authorise the implementation of the Proposed Transactions. Approval of remuneration changes In addition to the Proposed Transactions, this Meeting will also seek approval for the equity-based component of the remuneration of Invion’s Chief Executive Officer and Chairman, Mr Thian Chew, and Non-Executive Director, Mr Alistair Bennallack, both appointed in their positions since the last Annual General Meeting. This is the purpose of Resolutions 3 and 4. 1 Asia Pacific includes Asia and Oceania (other than Australia and New Zealand, which are the subject of an existing distribution agreement and licence agreement with RMW), and excludes Middle East, Russia and the specified territories of China, Hong Kong, Macau and Taiwan. 2 Independent Expert’s Report The Board has commissioned an Independent Expert’s Report prepared by PKF Melbourne (Independent Expert) in connection with the Proposed Transactions and the proposed issue of Options to Mr Thian Chew. The Independent Expert has concluded that the Proposed Transactions are not fair but reasonable to nonassociated Shareholders. The Independent Expert has concluded that the equity-based remuneration of Mr Thian Chew is not fair but reasonable to non-associated Shareholders. Shareholders should carefully consider the Independent Expert’s Report, a copy of which is set out in Schedule 2 to this Notice of Meeting. The Meeting will be held as a hybrid meeting, and Shareholders will be able to participate in a live webcast of the meeting online where Shareholders will be able to participate, ask questions and cast votes at the appropriate times whilst the Meeting is in progress. Shareholders who wish to participate in the Meeting online may register in advance for the Meeting: https://us02web.zoom.us/webinar/register/WN_7GieXacuT9ewr1hoxVmp3Q When: Thursday 23 September 2021 at 12PM AEST Topic: Invion Limited General Meeting After registering, you will receive a confirmation email containing information about joining the Meeting. The Company strongly recommends its Shareholders to lodge a directed proxy as soon as possible in advance of the Meeting even if they are planning to attend the Meeting online. Any Shareholders who may still wish to physically attend the Meeting should be mindful of new laws, government warnings and recommendations in relation to COVID-19 and monitor Invion’s website and announcements on the ASX website for updates about the Meeting. If it becomes necessary or appropriate to make alternative arrangements for the holding or conducting of the Meeting. The Company is happy to accept and answer questions submitted prior to the Meeting by email to mleydin@leydinfreyer.com.au. Where a written question is raised in respect of the key management personnel of the Company, the Resolutions to be considered at the Meeting, the Company will address the relevant question during the course of the Meeting or by written response after the Meeting (subject to the discretion of the Company not to respond to unreasonable and/or offensive questions). If the situation in relation to COVID19 were to change in a way that affected the position above. After registering, you will receive a confirmation email containing information about joining the Meeting. The Company strongly recommends its Shareholders to lodge a directed proxy as soon as possible in advance of the Meeting even if they are planning to attend the Meeting online. Any Shareholders who wish to attend the Meeting online should therefore monitor the Company’s website and its ASX announcements for any updates about the Meeting. If it becomes necessary or appropriate to make alternative arrangements for the holding or conducting of the Meeting, the Company will make further information available through the ASX website at asx.com.au (ASX: IVX) and on its website at https://inviongroup.com/. Your sincerely Thian Chew Chairman and Chief Executive Officer 3 INVION LIMITED ACN 094 730 417 Registered office: Level 4, 96-100 Albert Road, South Melbourne, VIC 3205 AGENDA The Explanatory Statement and Proxy Form, which accompany and form part of this Notice, include defined terms and describe in more detail the matters to be considered. Please consider this Notice, the Explanatory Statement and the Proxy Form in their entirety. 1. Resolution 1: Approval to issue Shares under the Placement to RMW Cho Health Technology Limited To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That, conditional upon the passing of Resolution 2, for the purpose of section 611 Item 7 of the Corporations Act 2001 (Cth) and ASX Listing Rule 10.11 and for all other purposes, approval be given for: (a) the issue of 321,428,571 Shares at an issue price of $0.014 per share, to be issued under a private placement to RMW Cho Health Technology Limited, as detailed in the Explanatory Memorandum; and (b) the acquisition by RMW Cho Health Technology Limited, Honsue Cho, RMWC Pty Ltd, Mr Thian Chew and Polar Ventures Limited of a Relevant Interest in the Shares that are allotted and issued in accordance with paragraph (a).” Independent Expert’s Report: Shareholders should carefully consider the Independent Expert’s Report in Schedule 2 to this Notice of Meeting for the purpose of section 611 Item 7 of the Corporations Act before voting on this Resolution. The Independent Expert’s Report comments on the fairness and reasonableness of the matters under this Resolution 1 to non-associated Shareholders. The Independent Expert has concluded that the issue of Shares under this Resolution 1 is not fair but reasonable to non-associated Shareholders. 2. Resolution 2: Approval to acquire a licence and distribution rights to NGPDT from RMW Cho Group Limited To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That, conditional upon the passing of Resolution 1, for the purpose of ASX Listing Rule 10.1 and for all other purposes, approval be given for the Company to acquire a licence and distribution rights to NGPDT from RMW Cho Group Limited on the terms and conditions of the CoDevelopment Agreement and Exclusive Licence and Distribution Agreement, as detailed in the Explanatory Memorandum.” Independent Expert’s Report: Shareholders should carefully consider the Independent Expert’s Report in Schedule 2 to this Notice of Meeting for the purpose of Listing Rule 10.11 before voting on Resolution. The Independent Expert’s Report comments on the fairness and reasonableness of the matters under this Resolution 2 to non-associated Shareholders. The Independent Expert has concluded that acquisition of licence and distribution rights under this Resolution 2 is not fair but reasonable to non-associated Shareholders. 3. Resolution 3: Approval to issue Options to Mr Thian Chew To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That for the purpose of section 611 Item 7 of the Corporations Act, ASX Listing Rule 10.14 and for all other purposes, approval be given for: 4 (a) the proposed issue of Options, and upon their exercise, the issue of their underlying Shares, to Mr Thian Chew, as described in the Explanatory Statement; and (b) the acquisition by RMW Cho Health Technology Limited, Honsue Cho, RMWC Pty Ltd, Mr Thian Chew and Polar Ventures Limited of a Relevant Interest in the Options that are to be issued in accordance with paragraph (a) and, upon their exercise, in their underlying Shares.” Independent Expert’s Report: Shareholders should carefully consider the Independent Expert’s Report in Schedule 2 to this Notice of Meeting for the purpose of section 611 Item 7 of the Corporations Act for this Resolution. The Independent Expert’s Report comments on the fairness and reasonableness of the matters under this Resolution 3 to non-associated Shareholders. The Independent Expert has concluded that the issue of Shares under this Resolution 3 is not fair but reasonable to non-associated Shareholders. 4. Resolution 4: Approval to issue Options to Mr Alistair Bennallack To consider and, if thought fit, to pass the following resolution as an ordinary resolution: "That for the purpose of ASX Listing Rule 10.11 and for all other purposes, approval be given for the proposed issue of zero priced Options to Mr Alistair Bennallack to the value of $54,740 in the Company, in lieu of a physical cash payment of up to 100% of director’s fees for the period 22 October 2020 to 31 August 2021 and on the basis set out as described in the Explanatory Statement.” By the order of the Board Melanie Leydin Company Secretary Dated: 23 August 2021 5 Notes 1. Entire Notice: The details of the Resolutions contained in the Explanatory Statement accompanying this Notice of Meeting should be read together with, and form part of, the Notice of Meeting. 2. Record Date: The Company has determined that for the purposes of the Meeting, Shares will be taken to be held by the persons who are registered as holding the Shares at 5pm (AEST) on 21 September 2021. Only those persons will be entitled to vote at the General Meeting and transfers registered after that time will be disregarded in determining entitlements to attend and vote at the General Meeting. 3. Proxies 4. a. Votes at the General Meeting may be given personally or by proxy, attorney or representative. b. Each Shareholder has a right to appoint one or two proxies. c. A proxy need not be a Shareholder of the Company. d. If a Shareholder is a company it must execute under its common seal or otherwise in accordance with its constitution or the Corporations Act. e. Where a Shareholder is entitled to cast two or more votes, the Shareholder may appoint two proxies and may specify the proportion of number of votes each proxy is appointed to exercise. f. If a Shareholder appoints two proxies, and the appointment does not specify the proportion or number of the Shareholder’s votes, each proxy may exercise half of the votes. If a Shareholder appoints two proxies, neither proxy may vote on a show of hands. g. A proxy must be signed by the Shareholder or his or her attorney who has not received any notice of revocation of the authority. Proxies given by corporations must be signed in accordance with that corporation’s constitution and the Corporations Act. h. To be effective, Proxy Forms must be received by the Company no later than 48 hours before the commencement of the General Meeting, this is no later than 12pm (AEST) Melbourne time on 21 September 2021. Any proxy received after that time will not be valid for the scheduled Meeting. Corporate Representative A Shareholder who is a body corporate and who is entitled to attend and vote at the Meeting, or a proxy who is a body corporate and who is appointed by a Shareholder entitled to attend and vote at the meeting, may appoint a person to act as its representative at the meeting by providing that person with: a. b. 5. a letter or certificate, executed in accordance with the body corporate's constitution, authorising the person as the representative; or a copy of the resolution, certified by the secretary or a director of the body corporate, appointing the representative. How the Chair will vote Undirected Proxies Subject to the restrictions set out in Note 6 below, the Chair of the meeting will vote undirected proxies in favour of all of the proposed Resolutions. 6. Voting Exclusion Statement Resolution 1 The Company will disregard any votes cast in favour of Resolution 1 by or on behalf of: • • • • • • RMW Cho Health Technology Limited; Mr Honsue Cho; RMWC Pty Ltd; Mr Thian Chew; Polar Ventures Limited; or an associate of any person referred to in the preceding paragraphs. Resolution 2 The Company will disregard any votes cast in favour of Resolution 2 by: • • • RMW Cho Group Limited; any other person who will obtain a material benefit as a result of the transaction (except a benefit solely by reason of being a holder of ordinary securities in the entity); or an associate of any person referred to in the preceding paragraphs, including Mr Honsue Cho, RMWC Pty Ltd, Mr Thian Chew and Polar Ventures Limited. Resolution 3 The Company will disregard any votes cast in favour of each of Resolution 3 by or on behalf of • • • Mr Thian Chew; any person(s) who will obtain a material benefit as a result of the proposed issues of securities (except a benefit solely by reason of being a holder of ordinary securities in the entity); or an associate of any person referred to in the preceding paragraphs, including Mr Honsue Cho, RMWC Pty Ltd, Mr Thian Chew and Polar Ventures Limited. Resolution 4 The Company will disregard any votes cast in favour of each of Resolution 4 by or on behalf of • Mr Alistair Bennallack; • • any person(s) who will obtain a material benefit as a result of the proposed issues of securities (except a benefit solely by reason of being a holder of ordinary securities in the entity); or an associate of any person referred to in the preceding paragraphs. However, the above voting exclusions for Resolutions 1 to 4 do not apply to a vote cast in favour of the Resolutions by: (a) (b) (c) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with directions given to the proxy or attorney to vote on the Resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the chair to vote on the Resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: i. ii. the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way. Furthermore, a vote must not be cast as proxy on any of Resolutions 3 and 4 by a member of the Key Management Personnel (as defined by the Corporations Act) or a closely related party of Key Management Personnel. However, a person described above (a “Restricted Voter”) may cast a vote on any of Resolutions 3 and 4 as a proxy if: (a) The Restricted Voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution(s); or (b) The Chairman is the Restricted Voter and the written appointment of the Chairman as proxy does not specify the way the proxy is to vote on the Resolution(s) and expressly authorises the Chairman to exercise the proxy even though the Resolution(s) is or are connected with the remuneration of a member of the Key Management Personnel. If you appoint the Chairman as your proxy and you do not direct the Chairman how to vote, you will be expressly authorising the Chairman to exercise the proxy even if the relevant resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company. 7. Enquiries Shareholders are invited to contact the Company Secretary on (03) 9692 7222 if they have any queries in respect of the matters set out in these documents. 2 EXPLANATORY STATEMENT Purpose of Information This Explanatory Statement (“Statement”) accompanies and forms part of the Company’s Notice of General Meeting (“Notice”) for the General Meeting (“Meeting”), which will be held as a hybrid meeting at Level 4, 96100 Albert Road, South Melbourne, VIC 3205 and via webinar conferencing facility on at 12.00pm (AEST) on 23 September 2021. Resolutions 1 and 2: Approval of the Proposed Transactions Background of the Proposed Transactions and corresponding Resolutions The purpose of Resolution 1 is for Shareholders to approve, pursuant to section 611 Item 7 of the Corporations Act 2001 (Cth) and ASX L.R. 10.11, the Placement to RMW Cho Health Technology Limited (“RCHT”), pursuant to a Placement Agreement. The purpose of Resolution 2 is for Shareholders to approve, pursuant to ASX L.R. 10.1, the acquisition of certain licence and distribution rights in the Territory pursuant to the Co-Development Agreement and Exclusive Distribution and Licence Agreement. The Proposed Transactions are contractually connected by conditions precedent as detailed further below. The Placement Agreement, the Co-Development Agreement and the Exclusive Distribution and Licence Agreement are collectively referred to below as the “Proposed Transactions Agreements”, the key terms of which are summarised in Schedule 1. Background to the Company Invion is a company limited by shares incorporated in Australia whose Shares have been publicly traded on the ASX since its listing on February 2011. Invion is a pre-clinical and clinical-stage life sciences (drug development) company that is leading the global research and development of PhotosoftTM technology for the treatment of a range of cancers, where such research and clinical trials are funded by the technology licensor, RMW Cho Group Limited (“RMW”), via an R&D services agreement with the Company. Invion currently holds the Australia and New Zealand licence rights to the PhotosoftTM technology. Background to RMW RMW is focused on acquiring, holding and implementing proprietary technologies and exclusive licenses for ground-breaking developments in the areas of medicine and other patented and uniquely profitable technologies RMW is a company incorporated in Hong Kong and either directly or indirectly controlled by Mr Honsue Cho. RMW has acquired extensive know how and has developed proprietary technologies such as Photo Dynamic Therapy (“PDT”) agents, equipment, methods, processes, techniques and protocols with respect to PDT, referred to as Next Generation Photo Dynamic Therapy and also known as Next Generation PDT Technology and/or PhotosoftTM technology (“NGPDT”). Background to RCHT RCHT is a company incorporated under the laws of Hong Kong. The Company has been advised that RCHT is an investment vehicle comprising high-net-worth individuals and sophisticated investors who are new investors to Invion and who are not associates of the Cho Associates. The sole director of RCHT is Mr Honsue Cho. As at the date of this Notice of Meeting, RCHT holds no Shares. Associates Based on a previous change in substantial holding notice lodged with ASX on 18 January 2021, the Company has been advised that Mr Honsue Cho, RMWC Pty Ltd, Polar Ventures and Mr Thian Chew (Invion’s Executive Chairman and CEO) are associates for the purposes of section 12(2) of the Corporations Act. Mr Thian Chew currently does not personally hold any Shares (but holds options in Shares), however he is the controller of Polar Ventures Limited. Mr Honsue Cho is the sole director of RCHT and the Company is advised that Mr Cho is expected to continue to be a director of RCHT for at least one year following completion of the Placement. The Company understands that RCHT is an associate of Mr Honsue Cho, RMWC Pty Ltd, Polar Ventures and Mr Thian Chew for the purposes of section 12(2) of the Corporations Act (together, the “Cho Associates”). Summary of the NGPDT technology PDT, referred to as Next Generation Photo Dynamic Therapy and also known as Next Generation PDT Technology and/or PhotosoftTM technology (“NGPDT”). NGPDT is built on medical research on Photo Dynamic Therapy (“PDT”) that is targeted to treat a variety of indications including cancers non-invasively. NGPDT is a chlorophyll-based PDT photosensitiser. Specifically, it is a complex of chlorin, chlorophyllin and zinc which activates at two light wage sensitivity ranges – 400-410 nm, 650-660 nm. PDT is a treatment application that involves three key components: a drug, called photosensitiser or photosensitizing agent (“PDT agent”), a light source with a particular type of light and tissue oxygen. The combination of these three components is thought to lead to the chemical destruction of tissues which have either selectively taken up the PDT agent or have been locally exposed to light. In addition to targeting cancer cells, PDT is hypothesised to affect tumours in other ways, including potentially damaged blood vessels in the tumour thereby preventing the cancer from receiving necessary nutrients and/or activating an immune response that attacks tumour cells. The Company believes there are a number of theoretical advantages to treating cancer and other indications with PDT: • • • • • • PDT can be targeted very precisely, thereby avoiding the usual side effects of systemic treatment; PDT can be used to de-bulk difficult-to-reach tumours prior to surgery; PDT is minimally invasive, in that the light source used can often be applied externally; PDT is reputable, unlike many radiation therapies; PDT is low cost; and PDT can be performed quickly on an outpatient basis. Summary of the Proposed Transactions On 2 June 2021, Invion and RMW entered into a Co-Development Agreement and an Exclusive Distribution and Licence Agreement with the following key material terms: • Invion and RMW will co-develop the Photosoft™ technology, an improved next generation Photodynamic Therapy (PDT), in relation to atherosclerosis and infectious diseases (including viral, bacterial, fungal and parasitic) (“Indications”) for the Territory. • RMW will contribute its existing intellectual property and know-how in relation to the Photosoft™ technology for the Indications and Invion will pay RMW a one-time amount of A$2.25M as its contribution to development costs of the Photosoft™ technology in relation to the Indications. • Invion and RMW will make further contributions towards the co-development of the Photosoft™ technology for the Indications as they relate to the Territory, on the basis that (subject to limited rights to renegotiate contributions in good faith): • o for development activities that are not directly related to clinical trials or commercialisation of the Photosoft™ technology, including pre-clinical studies, research activities, and all drug formulation and manufacturing (including scale up and GMP compliance), for the Indications in the Territory, Invion will be responsible for 25% and RMW will be responsible for 75% of contributions; and o for development activities that are directly related to clinical trials or commercialisation of the Photosoft™ technology, including preparatory work for clinical studies and engagement with regulatory authorities, for the Indications in the Territory, Invion will be responsible for 75% and RMW will be responsible for 25% of contributions. Invion will gain exclusive distribution rights to the Photosoft™ technology in the Territory for the Indications. 2 Simultaneously, Invion and RCHT entered into a Placement Agreement pursuant to which Invion has agreed to issue 321,428,571 Shares to RCHT at an issue price of A$0.014 per Share to raise approximately A$4.5 million before costs. Funds raised under the Placement will be used to pay: • the costs of the Transaction; • Invion’s $2.25 million contribution to RMW; • general working capital; and • to fund co-development of the Photosoft™ technology for the Indications in the Territory. A summary of the key terms of the Proposed Transaction Documents is set out in Schedule 1. There are no changes to the funding arrangements between RMW and its affiliates and Invion under the existing Research and Development Services Agreement executed on 31 August 2017. RMW and its affiliates will continue to fund the Company’s R&D activities relating to potential cancer treatments, including operating costs that relate to these activities. The cancer research programs remain the key area of focus for Invion. The Proposed Transactions Agreements are subject to the satisfaction of a number of conditions precedent including but not limited to the Company obtaining approvals by its shareholders as to the matters being sought at this Meeting under Resolutions 1 and 2. All conditions precedent other than the completion of the Placement have been satisfied. The Company is currently not aware of any information which may cause the conditions precedent to be breached or unfulfilled. However, there is a risk that these conditions precedent will be unfulfilled due to circumstances outside of its control. Key advantages of the Proposed Transactions The Directors consider that the key advantages to the Company and non-associated Shareholders of undertaking the Proposed Transactions are as follows: (a) the Company and RMW will both make contributions to co-develop, and the Company will be granted exclusive commercialisation rights to, the NGPDT technology in relation to the Indications for the Territory; (b) the NGPDT technology will expand the Company’s portfolio of assets and diversify its business by expanding into the diagnosis and treatment of the Indications for the Territory in addition to cancers; (c) there is an opportunity to build substantial value for Shareholders if the NGPDT technology is successfully proven for the Indications and the Company obtains all relevant approvals to commercialise the NGPDT technology and products in the Territory; and (d) the potential increase in market capitalisation of the Company following completion of the Proposed Transactions and successfully proving the NGPDT technology for the Indications may lead to increased coverage from investment analysts, access to improved equity capital market opportunities and increased liquidity. Key disadvantages of the Proposed Transactions The Directors consider that they key disadvantages to the Company and non-associated Shareholders of undertaking the Proposed Transaction are as follows: (a) current non-associated Shareholders will have their interests in the Company diluted by the Placement and Shares currently on issue will be dilut