SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October, 2014
Prana Biotechnology Limited
(Name of Registrant)
Level 2, 369 Royal Parade Parkville Victoria 3052 Australia
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):__
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____
PRANA BIOTECHNOLOGY LIMITED
6-K Items
1. Notice of Annual General Meeting and Explanatory Memorandum
ABN 37 080 699 065
Notice of Annual General Meeting and
Explanatory Memorandum
| Prana Biotechnology Limited: | ACN 080 699 065 |
| Date of Meeting: | Thursday 13th November 2014 |
| Time of Meeting: | 11:30am (AEDT) Registration from 11:15am |
| Place of Meeting: | Giorgios Restaurant Function Room, |
| 1235 High Street, | |
| Armadale Victoria, 3143 |
| This is an important document. It should be read in its entirety. |
| If you are in doubt as to the course you should follow, consult your financial or other professional adviser. |
| NOTICE OF 2014 ANNUAL GENERAL MEETING |  |
PRANA BIOTECHNOLOGY LIMITED
ACN 080 699 065
Notice is given that the 2014 Annual General Meeting of Prana Biotechnology Limited (“the Company” or "Prana") will be held at Giorgios Restaurant function room, 1235 High Street, Armadale Victoria, 3143 on Thursday 13th November 2014 at 11:30am (Melbourne, Victorian, daylight saving time), for the purposes of considering and, if thought fit, passing each of the resolutions referred to in this Notice of Annual General Meeting.
Further details in respect of each of the resolutions proposed in this Notice of Annual General Meeting are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting. The details of the resolutions contained in the Explanatory Memorandum should be read together with, and form part of, this Notice of Annual General Meeting.
Please read this Notice of Annual General Meeting carefully and consider directing your proxy on how to vote on each resolution by marking the appropriate box on the proxy form included with this Notice of Annual General Meeting. Shareholders who intend to appoint the Chairman as proxy (including appointment by default) should have regard to Proxy and Voting Instructions on page 5 of this Notice of Annual General Meeting.
ORDINARY BUSINESS
2014 Annual Financial Statements
To receive and consider the 2014 Annual Financial Statements of the Company in respect of the year ended 30 June 2014 and comprising the Annual Financial Report, the Directors’ Report and the Auditor’s Report. At the meeting, a representative of the Company's auditors, PricewaterhouseCoopers, will be invited to attend to answer questions about the audit of the Company’s 2014 Annual Financial Statements.
Ordinary Resolution – Resolution #1 – Non-binding resolution to adopt Remuneration Report
To consider and, if thought fit, to pass the following resolution as an advisory and non-binding ordinary resolution:
"THAT for the purposes of section 250R(2) of the Corporations Act, the Remuneration Report for the financial year ended 30 June 2014 as disclosed in the Directors' Report is adopted."
Voting Exclusion and Restriction Statement:
The Company will disregard all votes cast on Resolution 1 by, or on behalf of:
| · | a member of the key management personnel (KMP), details of whose remuneration are included in the Remuneration Report for the year ended 30 June 2014; or |
| · | a closely related party of a KMP, |
whether the votes are cast as a shareholder, proxy or in any other capacity.
However, the Company will not disregard a vote cast on Resolution 1 by a KMP or a closely related party of a KMP if it is cast as a proxy and it is not cast on behalf of a KMP or a closely related party of a KMP and either:
| · | the proxy is appointed by writing that specifies how the proxy is to vote on the resolution proposed in Resolution 1; or |
| · | the proxy is the Chairman of the meeting and the appointment of the Chairman as proxy specifies the way the proxy is to vote on Resolution 1 and expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a KMP for the Company or if the Company is part of a consolidated entity, for the entity. |
If you are a KMP or a closely related party of a KMP (or are acting on behalf of any such person) and purport to cast a vote that will be disregarded by the Company (as indicated above), you may be liable for an offence for breach of voting restrictions that apply to you under the Corporations Act.
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| NOTICE OF 2014 ANNUAL GENERAL MEETING | |
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, whether directly or indirectly. Members of KMP include its directors and certain senior executives.
A closely related party of a member of the KMP means any of the following:
| · | a spouse, child or dependent of the member; |
| · | a child or dependent of the member's spouse; |
| · | anyone else who is one of the member's family and may be expected to influence, or be influenced by, the member in the member's dealings with the Company; |
| · | a company the member controls; or |
| · | a person prescribed by regulations (as at the date of this notice of meeting, no additional persons have been prescribed by regulation). |
Shareholders who intend to appoint the Chairman as proxy (including an appointment by default) should refer to the Proxy and Voting Instructions on page 5 of this Notice of Annual General Meeting.
Further details in respect of this Resolution 1 are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
Ordinary Resolution – Resolution #2a – Election of Director – Professor Ira Shoulson
To consider and, if thought fit, pass as an ordinary resolution, the following:
"THAT Professor Ira Shoulson, a Director of the Company, who was appointed on 13 May 2014, to fill a casual vacancy (as permitted under the Company’s Constitution), being eligible for election as a Director of the Company and offering himself for election, be and herby is elected as a Director of the Company.”
Further details in respect of this Resolution 2a are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
Ordinary Resolution – Resolution #2b – Re-Election of Director – Mr Peter Marks
To consider and, if thought fit, pass as an ordinary resolution, the following:
"THAT Mr Peter Marks, a Director of the Company, who retires by rotation in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company."
Further details in respect of this Resolution 2b are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
Ordinary Resolution – Resolution #2c – Re-Election of Director – Mr Lawrence Gozlan
To consider and, if thought fit, pass as an ordinary resolution, the following:
"THAT Mr Lawrence Gozlan, a Director of the Company, who retires by rotation in accordance with the Company's Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company."
Further details in respect of this Resolution 2c are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
Ordinary Resolution – Resolution #3 – Ratification of previously issued securities - ATM
To consider and, if thought fit, pass the following as an ordinary resolution:
"THAT for the purposes of ASX Listing Rule 7.4, and for all other purposes, Shareholders approve the ratification of the issue of 62,834,612 fully paid ordinary shares (PBT) of the Company previously issued pursuant to a capital raising program, as detailed in the Explanatory Memorandum to this Notice of Meeting, by the Company pursuant to the terms described and set forth in the Explanatory Memorandum that accompanied and formed part of the Notice of Annual General Meeting.”
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| NOTICE OF 2014 ANNUAL GENERAL MEETING | |
Voting Exclusion and Restriction Statement:
The Company will disregard any votes cast on Resolution 3 by:
| · | persons who participated in the issue; or |
| · | an associate of those persons. |
However, the Company need not disregard a vote on Resolution 3 if:
| · | it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or |
| · | it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. |
Shareholders who intend to appoint the Chairman as proxy (including an appointment by default) should refer to the Proxy and Voting Instructions on page 5 of this Notice of Annual General Meeting.
Further details in respect of this Resolution 3 are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
SPECIAL BUSINESS
Special Resolution – Resolution #4 – Approval of 10% Placement Issue
To consider and, if thought fit, pass the following as a special resolution:
"THAT, pursuant to and in accordance with ASX Listing Rule 7.1A and for all other purposes, the Company may elect to utilise the issue of equity securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and on the terms and conditions described in the Explanatory Memorandum to this Notice of Meeting, be and is hereby approved."
Voting Exclusion and Restriction Statement:
The Company will, in accordance with ASX Listing Rule 14.11, disregard any votes cast in respect of Resolution 4 by a person who may participate in the 10% placement issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed, and any associates of those persons. As at the date of this Notice of Meeting the Company has no specific plans to issue equity securities under the 10% placement issue and therefore it is not known who (if any) may participate in a potential (if any) issue of equity securities under the 10% placement issue.
However, the Company need not disregard a vote cast on the resolution if:
| · | it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or |
| · | it is cast by the Chairman of the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides. |
Shareholders who intend to appoint the Chairman as proxy (including an appointment by default) should refer to the Proxy and Voting Instructions on page 5 of this Notice of Annual General Meeting.
Further details in respect of this Resolution 4 are set out in the Explanatory Memorandum accompanying this Notice of Annual General Meeting.
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| NOTICE OF 2014 ANNUAL GENERAL MEETING | |
OTHER BUSINESS
To consider any other business that may be brought before the Meeting in accordance with the Constitution of the Company and the Corporations Act.
By the order of the Board;
Mr Richard Revelins
Company Secretary
Prana Biotechnology Limited
Dated: Monday, 13th October 2014
The accompanying Explanatory Memorandum,
Proxy Form
and Voting Instructions form part of this Notice of Meeting.
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| NOTICE OF 2014 ANNUAL GENERAL MEETING | |
PROXY AND VOTING INSTRUCTIONS
Proxy Instructions
A Shareholder who is entitled to attend and vote at this meeting may appoint:
| (a) | one proxy if the Shareholder is only entitled to one vote; and |
| (b) | one or two proxies if the Shareholder is entitled to more than one vote. |
Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the Shareholder's voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes, in which case any fraction of votes will be disregarded.
The proxy may, but need not, be a member of the Company.
Where a Shareholder appoints two proxies, on a show of hands, neither proxy may vote if more than one proxy attends and on a poll each proxy may only exercise votes in respect of those shares or voting rights the proxy represents.
Proxies may be lodged using any of the following methods:
| - | online by visiting www.investorvote.com.au |
| - | by returning a completed Proxy Form in person or by post using the pre-addressed envelope provided with this Notice to: | |
| Computershare | Ivestor Services, P.O Box 242, Melbourne, Victoria, 3001 |
| - | by faxing a completed Proxy Form to 1800 783 447 (within Australia) +61 3 9473 2555 (outside Australia); |
| - | for intermediary online subscribers only (custodians), submit your voting intentions via www.intermediaryonline.com |
not less than 48 hours before the time for holding the Meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.
The proxy form must be signed by the Shareholder (or in the case of a joint holding, by each joint holder) or his/her attorney duly authorised in writing or, if the member is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation’s place of incorporation.
If you sign the proxy form and do not appoint a proxy, you will have appointed the Chairman of the meeting as your proxy. In that case, your shares will not be voted on Resolution 1 (Remuneration Report) unless you direct the Chairman of the meeting as your proxy how to vote by marking the appropriate box on the proxy form.
The appointment of one or more duly appointed proxies will not preclude a Shareholder from attending this meeting and voting personally. If the Shareholder votes on a resolution, the proxy must not vote as the Shareholder’s proxy on that resolution. A proxy form is attached to this Notice.
How the Chairman will vote undirected proxies
The Chairman of the meeting will vote undirected proxies on, and in favour of, all of the proposed resolutions (this excludes Resolution 1).
Proxies that are undirected on Resolution 1 (Remuneration Report)
If you appoint the Chairman of the meeting as your proxy (or if he may be appointed by default) and do not direct him how to vote on Resolution 1, your shares will not be voted.
Corporate Representatives
Any corporation which is a Shareholder of the Company may appoint a proxy, as set out above, or authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation’s place of incorporation, or in any other manner satisfactory to the Chairperson of the meeting) a natural person to act as its representative at any general meeting.
Corporate representatives are requested to bring appropriate evidence of appointment as a representative in accordance with the constitution of the Company. Attorneys are requested to bring the original or a certified copy of the power of attorney pursuant to which they were appointed. Proof of identity will also be required for corporate representatives and attorneys.
Voting Entitlement
For the purposes of section 1074E(2)(g)(i) of the Corporations Act and Regulation 7.11.37 of the Corporations Regulations, the Board has determined that Shareholders entered on the Company’s Register of Members as at 11th November 2014 at 7:00pm (Melbourne, Victorian, daylight saving time) are entitled to attend and vote at the meeting. Transactions registered after that time will be disregarded in determining the Shareholders entitled to attend and vote at the meeting.
On a poll, Shareholders have one vote for every fully paid ordinary share held. Holders of options are not entitled to vote.
In the case of joint holders of shares, if more than one holder votes at any meeting, only the vote of the first named of the joint holders in the share register of the Company will be counted.
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| EXPLANATORY MEMORANDUM | |
PRANA BIOTECHNOLOGY LIMITED
ACN 080 699 065
("the Company")
2014 ANNUAL GENERAL MEETING
PURPOSE OF INFORMATION
This Explanatory Memorandum ("this Memorandum") accompanies and forms part of the Company’s Notice of the 2014 Annual General Meeting ("AGM") to be held at Giorgios Restaurant function room, 1235 High Street, Armadale Victoria, 3143 on Thursday 13th November 2014 at 11:30am (Melbourne, Victorian, daylight saving time).
The Notice of the 2014 Annual General Meeting incorporates, and should be read together with, this Memorandum.
ORDINARY BUSINESS
2014 Annual Financial Statements
The 2014 Annual Financial Statements, comprising the Financial Report, Directors' Report and Auditor's Report for the year ended 30 June 2014 will be laid before the meeting. Shareholders will have the opportunity to ask questions about or make comments on the 2014 Annual Financial Statements and the management of the Company. A representative of the auditor will be invited to attend to answer questions about the audit of the Company’s 2014 Annual Financial Statements.
The Company’s 2014 Annual Financial Statements are set out in the Company’s 2014 Annual Report which can be obtained from the Company’s website, www.pranabio.com or upon request to the Company Secretary at the Company’s registered office:
Suite 1, 1233 High Street, Armadale, Victoria, 3143, Australia (telephone +61 3 9824 5254).
There is no requirement for these reports to be formally approved by Shareholders. No resolution is required to be moved in respect of this item.
Ordinary Resolution – Resolution #1: Non-binding Resolution - Remuneration Report
Background
Pursuant to the Corporations Act 2001 at the Annual General Meeting of a listed company, the Company must propose a resolution that the Remuneration Report be adopted.
The purpose of this resolution is to present to the Shareholders, the Company’s Remuneration Report so that Shareholders may ask questions about or make comments on the management of the Company in accordance with the requirements of the Corporations Act 2001 and vote to adopt the Remuneration Report for the year ended 30 June 2014.
This resolution is advisory only and does not bind the Company. However, the Board will consider the outcome of the vote made by Shareholders on the remuneration report at the meeting when reviewing the Company’s remuneration policies.
The Company has two Share Plans, the 2004 ASX Plan (for securities issued to Australian directors, employees and consultants) and the 2004 ADS Plan (for securities issued to US based directors, employees and consultants). A Pool of 60,000,000 securities was approved at the 2009 Annual General Meeting, at the 2012 Annual General Meeting the remaining 31,819,485 ordinary shares were refreshed.
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| EXPLANATORY MEMORANDUM | |
The Remuneration Report is contained within the 2014 Annual Report.
You may access the Annual Report by visiting the Company’s website www.pranabio.com.
Voting Restrictions
In accordance with the Corporations Act, a person appointed as a proxy must not vote on the basis of that appointment on this resolution if:
(a) the proxy is either:
| · | a director or member of the key management personnel for the Company; or |
| · | a closely related party of a member of the director or key management personnel for the Company; and |
(b) the appointment does not specify the way the proxy is to vote on the resolution.
However, the above prohibition does not apply if:
| · | the proxy is the chair of the meeting; and |
| · | the appointment expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with remuneration of a member of the key management personnel of the Company. |
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| EXPLANATORY MEMORANDUM | |
Ordinary Resolution – Resolution #2a: Election of Director – Professor Ira Shoulson
A Director appointed during the year by resolution of the Board of Directors to fill a casual vacancy retires from office, and seeks election in accordance with the Company’s constitution.
| Appointed to the Board | — | 13 May 2014 |
| Qualifications | — | MD, BPsych |
| Experience | — |
Ira Shoulson, MD is the Louis C. Lasagna Professor of Experimental Therapeutics and Professor of Neurology, Pharmacology and Medicine at the University of Rochester School of Medicine in Rochester, New York. He received his MD degree (1971) and postdoctoral training in medicine (1971-73) and neurology (1975-77) at the University of Rochester and in experimental therapeutics at the National Institutes of Health (1973-75). Dr. Shoulson founded the Parkinson Study Group (1985) and the Huntington Study Group (1994), international academic consortia devoted to research and development of treatments for Parkinson’s Disease, Huntington Disease and related neurodegenerative and neurogenetic disorders. He has served as principal investigator of the National Institutes of Health-sponsored trials "Deprenyl and Tocopherol Antioxidative Therapy of Parkinsonism" (DATATOP), the “Prospective Huntington At Risk Observational Study” (PHAROS), and more than 25 other multi-centre controlled trials. He is the Director of the Experimental Therapeutics Program at the University of Rochester Department of Neurology, the chair of the executive committees of the Huntington Study Group and the Parkinson Study Group, an associate editor of Archives of Neurology, a member of the National Institute of Neurological Disorder and Stroke Council, a consultant for the Food and Drug Administration, and the immediate past-president of the American Society for Experimental NeuroTherapeutics (ASENT). He has authored more than 220 scientific reports. |
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| EXPLANATORY MEMORANDUM | |
Ordinary Resolution – Resolution #2b: Re-Election of Director – Mr Peter Marks
At each Annual General Meeting of the Company, one third of the Directors of the Company must retire from office by rotation, in accordance with the Company’s Constitution. The Managing Director is not subject to rotation. No Director (except a Managing Director) shall retain office for a period in excess of three years without submitting himself or herself for re-election. A Director who retires from office by rotation and is eligible for re-election may offer him or herself for re-election.
Mr Peter Marks retires by rotation and being eligible offers himself for re-election.
| Appointed to the Board | — | 29 July 2005 |
| Last Elected by shareholders | — | 29 November 2011 |
| Qualifications | — | BEc LLB Grad. Dip. Comm. Law MBA |
| Experience | — |
From November 2006 to October 2011, Mr Marks also served as Executive Chairman of iSonea Ltd, formally KarmelSonix Ltd, a medical devices company listed on the ASX that is focused on developing and commercialising a range of devices in the respiratory and medicine space. From September 1998 until March 2001, Mr Marks was employed by KPMG Corporate Finance Ltd (Australia), where he rose to Director and was responsible for heading up the equity capital markets group in Melbourne. From January 1992 until July 1994, Mr Marks served as Head of the Melbourne Companies Department at the Australian Securities Exchange and was founding Director of Momentum Funds Management Pty Ltd, an Australian venture capital firm. From December 1990 until December 1991, Mr Marks served as Director of Corporate Finance at Burdett Buckeridge & Young Ltd in their Melbourne offices, from August 1988 until November 1990, he held senior corporate finance positions at Barings Securities Ltd, and from July 1985 until July 1988, he served as an Associate Director of McIntosh Securities, now Merrill Lynch Australia. In his roles with these various financial institutions, Mr Marks was responsible for advising a substantial number of listed and unlisted companies on issues ranging from corporate and company structure, to valuations, business strategies, acquisitions and international opportunities. For over 13 years until the end of August 2014, Mr. Marks was a Director of Peregrine Corporate Ltd, an Australian based investment bank. Mr Marks is currently a Director of Armadale Capital Plc (formerly Watermark Global Plc), an AIM listed company commercialising the treatment & recycling of acid mine drainage water from South African mines. Mr. Marks is currently the principal of Halcyon Corporate Pty Ltd, a corporate and capital markets advisory firm specializing in advising small to mid-cap companies. |
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| EXPLANATORY MEMORANDUM | |
Ordinary Resolution – Resolution #2c: Re-Election of Director – Mr Lawrence Gozlan
At each Annual General Meeting of the Company, one third of the Directors of the Company must retire from office by rotation, in accordance with the Company’s Constitution. The Managing Director is not subject to rotation. No Director (except a Managing Director) shall retain office for a period in excess of three years without submitting himself or herself for re-election. A Director who retires from office by rotation and is eligible for re-election may offer him or herself for re-election.
Mr Lawrence Gozlan retires by rotation and being eligible offers himself for re-election.
| Appointed to the Board | — | 8 August 2011 |
| Last Elected by shareholders | — | 7 October 2011 |
| Qualifications | — | B.Sc.(Hons) |
| Experience | — | Mr. Gozlan, a leading biotechnology investor and advisor, is the Chief Investment Officer and Founder of Scientia Capital, a specialised global investment fund focused exclusively in life sciences. Scientia Capital was founded to provide high level expertise and to manage investments for high net worth individuals, family offices and institutional investors wanting exposure to the biotechnology industry. Prior to this, Mr. Gozlan was responsible for the largest biotechnology investment portfolio in Australia as the institutional biotechnology analyst at QIC (“the Queensland Investment Corporation”), an investment fund with over AU$60 billion under management. He previously worked as the senior biotechnology analyst in the equities team at Foster Stockbroking, and gained senior corporate finance experience advising life sciences companies at Deloitte. Mr. Gozlan is an investment advisor to several companies in the biotechnology industry, presented at numerous international healthcare conferences, and has been featured in various published media as an expert on investing in life sciences. He holds a Bachelor of Science with Honours in microbiology and immunology from the University of Melbourne specializing in neurodegenerative diseases. |
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| EXPLANATORY MEMORANDUM | |
Ordinary Resolution – Resolution #3: Ratification of previously issued securities - ATM
Pursuant to ASX Listing Rule 7.4, and for all other purposes, Shareholder approval is sought for the ratification of the issue of 62,834,612 fully paid ordinary shares (PBT) of the Company previously issued pursuant to a capital raising during the period November 2013 to April 2014, utilising the Company’s at-the-market (ATM) facility. The ATM facility was operated by New York based McNicoll, Lewis & Vlak LLC (MLV).
Under ASX Listing Rule 7.1, an entity must not issue or agree to issue equity securities exceeding 15% of the share capital of the company within a 12 month period without shareholder approval.
ASX Listing Rule 7.4 provides that an issue made without approval under ASX Listing Rule 7.1 is treated as having been made with approval if the shares or other securities were issued without exceeding the limit imposed by ASX Listing Rule 7.1 and the company subsequently obtains shareholder approval for the prior issue.
Resolution 3 has been proposed to seek ratification of the prior issue of shares pursuant to ASX Listing Rule 7.4.
The allottees of the above mentioned Share Placement were to professional and sophisticated investors and clients of Australian Financial Service License holders and/or to buyers of American Depositing Receipts (ADRs) on NASDAQ where the issue was made to fulfil an on market transaction on NASDAQ. Any issue to fulfil an on market transaction on NASDAQ was made pursuant to the rules of NASDAQ, and subject to compliance with all Australian and US regulatory requirements.
The issue price was determined by the prevailing market price of securities on NASDAQ (1 ADR = 10 Ordinary Shares) during the period November 2013 to April 2014 which was in the range of A$0.257 (US$2.375 per ADR) to A$1.217 (US$11.000 per ADR).
The shares which are the subject of Resolution 3, are new fully paid ordinary shares (PBT) ranking equally with the Company's existing listed ordinary shares.
A$23.29 million was raised under this issue. The Company intends to use the capital raised to continue to fund current clinical development and research programs in neurodegeneration and to fund working capital requirements to deliver these programs, after payment of the costs of the issue.
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| EXPLANATORY MEMORANDUM | |
NOTE:
Unless otherwise specified, all monetary amounts are expressed in Australian dollars.
SPECIAL BUSINESS
Special Resolution – Resolution #4: Approval of 10% placement issue
| 1. | General |
In 2012, the ASX introduced ASX Listing Rule 7.1A which enables certain ‘eligible entities’ to issue equity securities of up to 10% of their issued share capital through placements over a 12 month period commencing after the annual general meeting (Additional Placement Capacity). ASX Listing Rules require that Shareholders approve the Additional Placement Capacity by special resolution, at an annual general meeting before any equity securities are issued under the Additional Placement Capacity.
ASX Listing Rule 7.1A enables eligible entities to issue equity securities (as that term is defined in the ASX Listing Rules) up to 10% of its issued share capital through placements over a 12 month period after the Annual General Meeting (10% Placement Facility). The 10% Placement Facility is in addition to the Company’s 15% placement capacity under ASX Listing Rule 7.1. An eligible entity for the purposes of ASX Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.
The Company seeks Shareholder approval by way of a special resolution to have the ability to issue equity securities under the 10% Placement Facility. The exact number of equity securities (if any) to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (refer to section 2(c) below). The Company may use funds raised from any 10% Placement Facility for funding of specific projects and/or general working capital. It may also use the 10% Placement Facility for non-cash consideration purposes such as joint venture, licensing or collaboration agreements or the acquisition of new products (although the Company presently has no proposal to do so).
The Directors of the Company believe that Resolution 4 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.
| 2. | Description of ASX Listing Rule 7.1A |
| (a) | Shareholder approval |
The ability to issue equity securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.
| (b) | Equity Securities |
Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of equity securities of the Company.
The Company, as at the date of the Notice, has on issue three classes of equity securities, Shares, listed options and unlisted options.
| (c) | Formula for calculating 10% Placement Facility |
ASX Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of equity securities calculated in accordance with the following formula:
(A x D) – E
| A | is the number of shares on issue 12 months before the date of the issue or agreement: |
| (A) | plus the number of fully paid shares issued in the 12 months under an exception in ASX Listing Rule 7.2; |
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| EXPLANATORY MEMORANDUM | |
| (B) | plus the number of partly paid shares that became fully paid in the 12 months; |
| (C) | plus the number of fully paid shares issued in the 12 months with approval of holders of shares under ASX Listing Rules 7.1 and 7.4; and |
| (D) | less the number of fully paid shares cancelled in the 12 months. |
Note that A has the same meaning in ASX Listing Rule 7.1 when calculating an entity’s 15% placement capacity.
| D | is 10%. |
| E | is the number of equity securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under ASX Listing Rules 7.1 or 7.4. |
| (d) | ASX Listing Rule 7.1 and ASX Listing Rule 7.1A |
The ability of an entity to issue equity securities under ASX Listing Rule 7.1A is in addition to the entity’s 15% placement capacity under ASX Listing Rule 7.1.
The actual number of equity securities that the Company will have capacity to issue under ASX Listing Rule 7.1A will be calculated at the date of issue of the equity securities in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (refer to section 2(c) above).
| (e) | Minimum Issue Price |
The issue price of equity securities issued under ASX Listing Rule 7.1A must be not less than 75% of the VWAP of equity securities in the same class calculated over the 15 trading days immediately before:
| (i) | the date on which the price at which the equity securities are to be issued is agreed; or |
| (ii) | if the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on which the equity securities are issued. |
| (f) | 10% Placement Period |
Shareholder approval of the 10% Placement Facility under ASX Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:
| (i) | the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or |
| (ii) | the date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking), (10% Placement Period). |
| 3. | ASX Listing Rule 7.1A |
The effect of Resolution 4 will be to allow the Directors to issue the equity securities under ASX Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under ASX Listing Rule 7.1.
Resolution 4 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).
| Page 8 of 12 |
| EXPLANATORY MEMORANDUM | |
| 4. | Specific Information required by ASX Listing Rule 7.3A |
Pursuant to and in accordance with ASX Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:
| (a) | The equity securities will be issued at an issue price of not less than 75% of the VWAP for the Company’s equity securities over the 15 trading days immediately before: |
| (i) | the date on which the price at which the equity securities are to be issued is agreed; or |
| (ii) | if the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on which the equity securities are issued. |
| (b) | If Resolution 4 is approved by the Shareholders and the Company issues equity securities under the 10% Placement Facility, the existing Shareholders’ voting power in the Company will be diluted as shown in the below table (in the case of unlisted options, only if the unlisted options are exercised). |
There is a risk that:
| (i) | the market price for the Company’s equity securities may be significantly lower on the date of the issue of the equity securities than on the date of the Annual General Meeting; and |
| (ii) | the equity securities may be issued at a price that is at a discount to the market price for the Company’s equity securities on the issue date, |
which may have an effect on the amount of funds raised by the issue of the equity securities.
The table below shows the dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable “A” calculated in accordance with the formula in ASX Listing Rule 7.1A(2) as at the date of this Notice of Meeting.
The table below also shows:
| (i) | two examples where variable “A” has increased by 50% and 100%. Variable “A” is based on the number of ordinary shares the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under ASX Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and |
| (ii) | two examples of where the price of ordinary securities has decreased by 50% and increased by 50% as against the current market price. |
| Dilution | ||||||||||||||
| $0.16 | $0.24 | $0.36 | ||||||||||||
| Variable “A” in ASX Listing Rule 7.1A.2 | 50% decrease in Deemed Price | Deemed Price | 50% Increase in Deemed Price | |||||||||||
| Current Variable A | 10% Voting Dilution | 48,893,696 Shares | 48,893,696 Shares | 48,893,696 Shares | ||||||||||
| 488,936,960 Shares | Funds raised | $ | 7,822,991 | $ | 11,734,487 | $ | 17,601,731 | |||||||
| 50% increase in current Variable A | 10% Voting Dilution | 73,340,544 Shares | 73,340,544 Shares | 73,340,544 Shares | ||||||||||
| 733,405,440 Shares | Funds raised | $ | 11,734,487 | $ | 17,601,731 | $ | 26,402,596 | |||||||
| 100% increase in current Variable A | 10% Voting Dilution | 97,787,392 Shares | 97,787,392 Shares | 97,787,392 Shares | ||||||||||
| 977,873,920 Shares | Funds raised | $ | 15,645,983 | $ | 23,468,974 | $ | 35,203,461 | |||||||
* Please note that the balances shown above are true and correct at time of printing.
| Page 9 of 12 |
| EXPLANATORY MEMORANDUM | |
The table has been prepared on the following assumptions:
| (i) | The Company issues the maximum securities available under the ASX Listing Rule 7.1A being 10% of the Company’s shares on issue at the date of the Meeting; |
| (ii) | No unlisted options are exercised into fully paid ordinary securities before the date of the issue of securities under ASX Listing Rule 7.1A. The Company has 18,774,974 unlisted options on issue at the date of this Notice of Meeting; |
| (iii) | The table does not demonstrate an example of dilution that may be caused to a particular shareholder by reason of placements under ASX Listing Rule 7.1A, based on that shareholder’s holding at the date of the Meeting; |
| (iv) | The table only demonstrates the effect of issues of securities under ASX Listing Rule 7.1A. It does not consider placements made under ASX Listing Rule 7.1, the “15% rule”; |
| (v) | The price of ordinary securities is deemed for the purposes of the table above to be $0.24, being the closing price of the Company’s listed securities on ASX on 29 September 2014 (Deemed Price). The Deemed Price is indicative only and does not consider the 20% discount to market that the securities may be placed at; and |
| (vi) | The table does not demonstrate the effect of listed or unlisted options being issued under ASX Listing Rule 7.1A, it only considers the issue of the fully paid ordinary securities. |
| (c) | The Company will only issue and allot the equity securities during the 10% Placement Period. The approval under Resolution 4 for the issue of the equity securities will cease to be valid in the event that Shareholders approve a transaction under ASX Listing Rule 11.1.2 (a significant change to the nature or scale of activities or ASX Listing Rule 11.2 (disposal of main undertaking). |
| (d) | The Company may seek to issue the equity securities for the following purposes: |
| (i) | non-cash consideration including for joint venture, licensing or collaboration agreements or the acquisition of new projects (although the Company presently has no proposal to do so). In such circumstances the Company will provide a valuation of the non-cash consideration as required by ASX Listing Rule 7.1A.3; or |
| (ii) | cash consideration. In such circumstances, the Company intends to use the funds raised towards advancing specific Company projects and/or general working capital. |
The Company will comply with the disclosure obligations under ASX Listing Rules 7.1A(4) and 3.10.5A upon issue of any equity securities.
The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of equity securities will be determined on a case-by-case basis having regard to factors including but not limited to the following:
| (i) | the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate; |
| (ii) | the effect of the issue of the Equity Securities on the control of the Company; |
| (iii) | the financial situation and solvency of the Company; and |
| (iv) | advice from corporate, financial and broking advisers (if applicable). |
The allottees under the 10% Placement Facility have not been determined as at the date of this Notice of Meeting but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.
| Page 10 of 12 |
| EXPLANATORY MEMORANDUM | |
Further, if the Company were to pursue an acquisition and were it to be successful in acquiring new resources assets or investments, it is possible that the allottees under the 10% Placement Facility will be the vendors of the new resources assets or investments.
| (e) | The Company previously obtained approval for the Additional Placement Capacity at its 2012 and 2013 Annual General Meeting. |
| (f) | A voting exclusion statement is included in the Notice of Meeting to which this Explanatory Memorandum relates. At the date of that Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder’s votes will therefore be excluded under the voting exclusion in the Notice. |
Summary of Shares issued in the 12 months prior to Meeting:
| Issued to / basis of issue | Category | No. Ordinary Shares | No. of Nil Consideration Securities Issued | Average Issue Price | Funds Raised | |||||||||||||
| Exercise of Options | A | 8,949,094 | 261,750 | $ | 0.22 | $ | 1,915,426 | |||||||||||
| ATM | B | 62,851,720 | - | $ | 0.34 | $ | 21,669,078 | |||||||||||
| Shares Issued for Services | C | 1,110,000 | 1,110,000 | $ | - | $ | - | |||||||||||
| Total | 72,910,814 | 1,371,750 | $ | 23,584,504 | ||||||||||||||
In the 12 months prior to the Meeting, the Company has issued 72,910,814 Shares representing 17.53% of Shares on issue 12 months prior to the Meeting.
| Page 11 of 12 |
| EXPLANATORY MEMORANDUM | |
The information in the below tables is provided in accordance with ASX Listing Rule 7.3A.6 (b).
Shares issued in the 12 months prior to Meeting:
| Category | Date of Issue | No. Ordinary Shares | Issue Price | Closing Price* | Discount / Premium# | Issued to / basis of issue | Cash / Non-Cash | Funds Raised | Use of funds or if non-cash then value based on share price of $0.44 | |||||||||||||||||||
| A | 25/11/2013 | 200,000 | 0.33 | 0.52 | Options Exercised - Key Management Personnel - PBTAQ | Cash | $ | 66,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 13/12/2013 | 73,200 | 0.25 | 0.69 | Options Exercised - Employee - PBTAW | Cash | $ | 18,300 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 20/12/2013 | 81,750 | 0.00 | 0.78 | Options Exercised - Employee - PBTAB | Non-Cash | Nil | Current non-cash value of $12,266 | ||||||||||||||||||||
| A | 20/12/2013 | 100,000 | 0.33 | 0.78 | Options Exercised - Key Management Personnel - PBTAQ | Cash | $ | 33,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 3/01/2014 | 1,700,000 | 0.23 | 0.77 | Options Exercised - Investor - PBTAI | Cash | $ | 382,500 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 28/01/2014 | 500,000 | 0.23 | 1.10 | Options Exercised - Investor - PBTAI | Cash | $ | 112,500 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 6/02/2014 | 500,000 | 0.23 | 1.30 | Options Exercised - Investor - PBTAI | Cash | $ | 112,500 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 6/02/2014 | 28,900 | 0.23 | 1.30 | Options Exercised - Investor - PBTAI | Cash | $ | 6,503 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 6/02/2014 | 3,400,000 | 0.23 | 1.30 | Options Exercised - Investor - PBTAI | Cash | $ | 765,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 6/02/2014 | 50,000 | 0.25 | 1.30 | Options Exercised - Employee - PBTAW | Cash | $ | 12,500 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 21/02/2014 | 60,000 | 0.15 | 0.86 | Options Exercised - Employee - PBTAS | Cash | $ | 9,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 21/02/2014 | 157,818 | 0.25 | 0.86 | Options Exercised - Employee - PBTAW | Cash | $ | 39,455 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 21/02/2014 | 146,128 | 0.15 | 0.86 | Options Exercised - Employee - PBTAS | Cash | $ | 21,919 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 26/02/2014 | 34,220 | 0.37 | 1.04 | Options Exercised - Employee - PBTAC | Cash | $ | 12,661 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 26/02/2014 | 47,700 | 0.25 | 1.04 | Options Exercised - Employee - PBTAW | Cash | $ | 11,925 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 100,000 | 0.33 | 1.16 | Options Exercised - Key Management Personnel - PBTAQ | Cash | $ | 33,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 60,000 | 0.25 | 1.16 | Options Exercised - Employee - PBTAW | Cash | $ | 15,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 66,500 | 0.15 | 1.16 | Options Exercised - Employee - PBTAS | Cash | $ | 9,975 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 1,000,000 | 0.15 | 1.16 | Options Exercised - Consultant - PBTAS | Cash | $ | 150,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 100,000 | 0.33 | 1.16 | Options Exercised - Key Management Personnel - PBTAQ | Cash | $ | 33,000 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 11/03/2014 | 146,128 | 0.15 | 1.16 | Options Exercised - Key Management Personnel - PBTAS | Cash | $ | 21,919 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 3/04/2014 | 216,750 | 0.23 | 0.25 | Options Exercised - Investor - PBTAI | Cash | $ | 48,769 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||||
| A | 21/07/2014 | 180,000 | 0.00 | 0.26 | Options Exercised - Employee - PBTAB | Non-Cash | Nil | Current non-cas h val ue of $25,488 | ||||||||||||||||||||
| B | 11/03/2014 | 980,130 | 1.23 | 1.16 | 5.80 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 1,202,928 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 12/03/2014 | 41,760 | 1.18 | 1.10 | 7.41 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 49,339 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 14/03/2014 | 1,594,220 | 1.11 | 1.03 | 7.61 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 1,767,019 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 17/03/2014 | 2,280,750 | 1.05 | 1.12 | (5.83 | %) | Issue of Shares to US Investors as per ATM | Cash | $ | 2,405,397 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 3/04/2014 | 22,339,170 | 0.31 | 0.25 | 24.69 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 6,963,613 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 4/04/2014 | 17,290,080 | 0.27 | 0.25 | 6.60 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 4,607,964 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| B | 7/04/2014 | 18,325,610 | 0.25 | 0.23 | 10.86 | % | Issue of Shares to US Investors as per ATM | Cash | $ | 4,672,819 | After cost proceeds will be used for working capital, research programs and current clinical development. | |||||||||||||||||
| C | 7/04/2014 | 1,000,000 | 0.00 | 0.23 | (100.00 | %) | Issue of Shares to Consultant | Non-Cash | Nil | Current non-cash value of $252,750 | ||||||||||||||||||
| C | 21/07/2014 | 110,000 | 0.00 | 0.26 | (100.00 | %) | Issue of Shares to Consultant | Non-Cash | Nil | Current non-cash value of $25,300 | ||||||||||||||||||
| Total | 72,910,814 | $ | 23,584,504 | |||||||||||||||||||||||||
* Closing Price: Closing price of Shares as traded on ASX on Date of Issue.
# Discount / Premium: Discount / premium of Issue Price to Closing Price.
As at the date of this Notice of Meeting, the Company has not spent the funds raised in any of the issues tabled above.
The Directors unanimously recommend Shareholders vote in favour of Special Resolution – Resolution 4.
| Page 12 of 12 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PRANA BIOTECHNOLOGY LIMITED | |||
| (Registrant) | |||
| By: | /s/ Geoffrey Kempler | ||
| Geoffrey Kempler, | |||
| Executive Chairman | |||
October 14, 2014