As filed with the Securities and Exchange Commission on November 22, 2006.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM F-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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Bontan Corporation Inc.
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant's name into English)
Ontario Not Applicable
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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47 Avenue Road, Suite 200
Toronto, Ontario, M5R 2G3 Canada
(416) 929-1806
(Address and telephone number of Registrant's principal executive offices)
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Kam Shah, Chief Executive Officer
47 Avenue Road, Suite 200
Toronto, Ontario, M5R 2G3 Canada
(416) 929-1806
(Name, address and telephone number of agent for service)
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Copies of communications to:
Jeffrey C. Robbins, Esq.
Messerli & Kramer P.A.
150 South Fifth Street, Suite 1800
Minneapolis, Minnesota 55402 USA
(612) 672-3706
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. |X|
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_|
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. o
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
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Calculation of Registration Fee
Title of Securities To Be Registered | Amount To Be Registered(1) | Proposed Maximum Price Per Share (2) | Proposed Maximum Aggregate Offering | Amount Of Registration Fee |
Common shares, no par value(2) | 21,840,000 | $0.35 | $7,644,000 | $817.91 |
(1)
These shares are being registered for resale on behalf of the selling shareholders named in this prospectus and consist of (a) 10,400,000 outstanding common shares, and (b) 11,440,000 common shares issuable upon the exercise of outstanding warrants. Pursuant to Rule 416, this Registration Statement also relates to an indeterminate number of additional common shares resulting from stock splits, stock dividends or similar transactions with respect to the common shares being registered hereunder.
(2)
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933 on the basis of the average bid and asked price on the Over-the-Counter Bulletin Board of NASDAQ as of November 13, 2006.
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The selling shareholders named in this prospectus may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. The prospectus made part of this registration statement is not an offer to sell these securities and it is not a solicitation of an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted. IF YOU ARE NOT A NAMED SELLING SHAREHOLDER YOU MAY NOT SELL OUR COMMON SHARES PURSUANT TO THE PROSPECTUS MADE PART OF THIS REGISTRATION STATEMENT.
Subject to Completion, dated November 22, 2006
PROSPECTUS
BONTAN CORPORATION INC.
21,840,000 Common Shares
We are registering 21,840,000 common shares of Bontan Corporation Inc. for resale by the selling shareholders named herein consisting of (i) 10,400,000 outstanding common shares acquired by the selling shareholders from us in a private placement transaction commencing February 2006 and ending April 2006, (ii) 10,400,000 common shares issuable upon the exercise of outstanding warrants granted to selling shareholders in connection with the private placement, and (iii) 1,040,000 common shares issuable upon the exercise of outstanding warrants granted to Current Capital Corp., an affiliate of us, as part of a finder’s fee in our private placement.
Our registration of the common shares hereby does not necessarily mean that the selling shareholders will exercise any of the warrants or sell all or any of the shares covered by this prospectus. The selling shareholders will receive all of the proceeds from the sale of the shares offered in this prospectus. We will receive the exercise price of the warrants described in this prospectus to the extent they are exercised by the selling shareholders or their transferees.
Our common shares are quoted on the NASDAQ Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “BNTNF”. On November 13, 2006, the average of the closing bid and asked prices of our common shares on the OTCBB was $0.35 per share.
The selling shareholders may, from time to time, offer the shares under this prospectus directly or through one or more broker-dealers on the OTCBB or on any national securities exchange or automated quotation system on which our common shares may then be listed or traded, in negotiated transactions or otherwise, at prices related to the prevailing market price or at negotiated prices. We will pay all expenses to register the common shares. Any underwriting commissions, expenses, brokerage fees, transfer taxes, or other fees incurred by the selling shareholders in selling their common shares shall be the responsibility of the selling shareholders. Please see “Plan of Distribution” and "Expenses Associated with the Registration."
An investment in our common shares involves a high degree of risk and only people who can afford the loss of their entire investment should consider investing. See “Risk Factors” beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offence. IF YOU ARE NOT A NAMED SELLING SHAREHOLDER HEREIN YOU MAY NOT SELL SHARES OF OUR COMMON STOCK PURSUANT TO THIS PROSPECTUS. See page 13 for a list of selling shareholders.
The date of this Prospectus is ________, 2006.
TABLE OF CONTENTS
The terms "Company", "we", "us" and "our" as used in this prospectus refer to Bontan Corporation Inc. and its subsidiaries, as a combined entity, except where the context requires otherwise.
We prepare our consolidated financial statements in accordance with Canadian generally accepted accounting principles (“GAAP”) and all financial information set out herein has been determined in accordance with Canadian GAAP. All financial information presented in this prospectus is in Canadian dollars, unless otherwise indicated. All references to “$” or “dollars” means Canadian dollars and all references to “US$” means United States dollars. On November 13, 2006, $1.00 Canadian dollar equalled approximately $.88 U.S. dollars.
We are a "foreign private issuer" as defined in Rule 3b-4 under the Securities Exchange Act of 1934 (the "Exchange Act"). As a result, our proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and transactions in our equity securities by our officers and directors are exempt from Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. We file annually an annual report on Form 20-F containing financial statements that have been examined and reported on, with an opinion expressed by, a qualified independent auditor or certified public accountant.
The distribution of this prospectus and the offering or sale of the common shares in certain jurisdictions is restricted by law. This prospectus may not be used for, or in connection with, and does not constitute, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstance in which such offer or solicitation is not authorized or is unlawful. Persons into whose possession this prospectus may come are required to inform themselves about and to observe such restrictions. IF YOU ARE NOT A NAMED SELLING SHAREHOLDER HEREIN YOU MAY NOT SELL OUR COMMON SHARES PURSUANT TO THIS PROSPECTUS.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes and incorporates forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. All statements included or incorporated in this prospectus regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we actually will achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included or incorporated in this prospectus, particularly under the heading "Risk Factors", that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. We do not assume any obligation to update any forward-looking statements.
THE COMPANY
Background. We are a Canadian corporation incorporated under the laws of the Province of Ontario. Since April 2003, we have been a diversified natural resource company that invests in exploration, development and exploitation projects worldwide through our wholly-owned subsidiaries by acquiring joint venture, indirect and direct participation interests and working interests in those projects. During the fiscal year 2006, we sold our indirect participation interest in an oil exploration project and wrote off our working interest in a gas project owing to a dry test well. We currently do not own any interests in any oil or gas project or any natural resource project. We are currently seeking opportunities to acquire oil and gas interests. We have over US $5,000,000 in cash (US $2,441,100) and marketable securities ($US 3,022,470) as of September 30, 2006.
We were originally incorporated under the Business Corporation Act (Ontario) in 1973 under the name Kamlo Gold Mines Limited and went through multiple name changes and five major changes in our business activities including a marine propulsion business, a snack food business, and an emerging technology investments business. Details of these changes are provided in our Registration Statement on Form 20-F dated June 12, 2000 and a summary is provided in our Annual Report on Form 20-F dated August 29, 2006. On April 21, 2003, we changed our name to "Bontan Corporation Inc." when we adopted our business strategy to focus on the natural resource sector.
Business Plan. Our long-term business plan continues to be focused on becoming a diversified natural resource company that invests in major oil and gas exploration prospects. Through our wholly-owned subsidiaries, we will continue to seek highly visible opportunities in countries around the globe with a history of natural resource production that offer exciting and attractive propositions. We will seek to minimize risk by bringing in either joint venture, carried or working interest partners, depending on the size and scale of the project.
It is our current belief that oil and gas exploration is a high priority all over the world and especially in North America. Higher price levels for both these natural resources which have occurred over the past twelve months encourage new drilling activities. Our past experience with our two oil and gas projects enables us to more efficiently select and evaluate potential exploration projects in the oil and gas sector than in the other resource sectors. During the past several months, we have received without solicitation opportunities to participate in oil and gas exploration projects as a result of our past involvement in similar projects.
Therefore, our current business model, based on our experience with resource projects handled over the recent past and our assumptions set forth above, envisions the following key features:
a.
We will focus only on oil and gas exploration projects;
b.
Preference will be given to projects that have proven but undeveloped reserves rather than probable or potential reserves;
c.
We will invest our resources in projects which involves multiple well exploration potentials;
d.
Preference will be given to explorations involving shallow wells (up to 7,500 ft.)
rather than deep wells (over 15,000 ft.);
e.
Preference will be given to projects with other experienced partners who are
involved in the project;
f.
We will attempt to allocate our cash or liquidity resources to more than
one project.
Corporate Information. Our corporate offices are located at 47 Avenue Road, Suite 200, Toronto, Ontario Canada M5R 2G3 and our telephone number is (416) 929-1806. We are a reporting issuer in the province of Ontario. Our common shares are listed on the NASDAQ OTCBB under the symbol "BNTNF" in the United States.
RISK FACTORS
Please consider carefully the following risk factors and uncertainties, which the Company faces in its business, and other information contained in this prospectus, before investing in the Company's common shares. This summary of risk factors is not meant to be exhaustive. If any of the following risks actually occur, the Company's business, results of operations and financial condition could suffer significantly and you could lose all or part of your investment.
Risk Factors Related to Our Company
We have a history of operating losses and may not achieve or sustain profitability in the future.
We have incurred significant operating losses during recent fiscal years. We have not yet had any revenue from the exploration activities nor have we ever found that development activity is warranted on any of our properties. As of June 30, 2006, we had an accumulated deficit of approximately $32.3 million. We currently have no interest in any oil or gas property or any natural resource project.
We expect to continue to incur losses until it is determined that properties in which we may acquire interests in the future can be sufficiently developed for commercialization. Even if it is determined that such properties should be developed for commercialization, there is no certainty that we will produce revenue, operate profitably or provide a return on investment in the future. We cannot assure you that we will be able to achieve or sustain profitable operations in the future.
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We are in the process of seeking oil and gas opportunities and currently do not own any interests or properties.
Currently, we do not own any interest in any oil or gas project or any natural resource project. We are assessing various opportunities, none of which may meet our eligibility requirements. Consequently, we may not own any interest for an indeterminate amount of time. As a result, we will use our cash resources to pay for expenses and costs we incur in our efforts to identify appropriate opportunities as well as for our standard operating costs.
Our operations are subject to substantial exploration and development risks.
The Company anticipates participating in oil and gas resource properties in the hope of locating reserves. The Company's property interests, when acquired will most likely be in the exploration stage only. Accordingly, there is little likelihood that the Company will realize any profits in the short to medium term. Any profitability in the future from the Company's business will be dependent upon locating reserves, which itself is subject to numerous risk factors.
The business of exploring for and producing oil and gas involves a substantial risk of investment loss which, even a combination of experience, knowledge and careful evaluation may not be able to overcome. The principal resources necessary for the exploration and production of crude oil and natural gas are leasehold prospects under which crude oil and natural gas reserves may be discovered, drilling rigs and related equipment to explore for such reserves and knowledgeable personnel to conduct all phases of crude oil and natural gas operations, all of which requires a substantial investment.
Drilling oil and gas wells involves the risk that the wells will be unproductive or that, although productive, the wells do not produce oil and/or gas in economic quantities. Other hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations.
A productive well may become uneconomic in the event water or other deleterious substances are encountered, which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. As with any petroleum property, there can be no assurance that oil and gas will be produced from the properties in which the Company has interests.
In addition, the marketability of oil and gas, which may be acquired or discovered, will be affected by numerous factors beyond the control of the Company. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection.
The extent of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital. There is no assurance that our anticipated exploration and development activities in future resource properties will ultimately yield oil or gas in commercial quantities. Drilling for oil and gas may be unprofitable. Dry holes and wells that are productive but do not produce sufficient net revenues after drilling, operating and other costs are unprofitable. We cannot assure you that we will be able to achieve profitable operations in the future.
In determining the purchase price for our future interests, we will rely on both internal and external assessments relating to estimates of exploration, production and possible reserves that may prove to be materially inaccurate.
The price we are willing to pay for an interest in an oil and gas project is based on a combination of projected exploration and production costs and on the estimates of potential reserves. Actual costs and reserve could vary materially from these estimates. Consequently, the interests we acquire may be less unproductive than expected, or not productive at all, which could adversely affect us or cause us to lose our entire invest, or both. Initial assessments of an interest will be based on a report by engineers or firms of engineers and these initial assessments may differ significantly from our subsequent assessments.
Our interests are subject to uninsurable risks.
Our industry also experiences numerous operating risks. These operating risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards. Environmental hazards include oil spills, natural gas leaks, ruptures or discharges of toxic gases. Such events could result in substantial damage to oil and gas wells, producing facilities and other property and personal injury.
Although management believes the operator of any properties in which the Company and its subsidiaries may acquire interests, will acquire and maintain appropriate insurance coverage in accordance with standard industry practice, the Company and its subsidiaries may suffer losses from uninsurable hazards or from hazards which the operator has chosen not to insure against because of high premium costs or other reasons. If any of these industry operating risks occur, the Company and its subsidiaries may face liability. The payment of any such liabilities may have a material, adverse effect on the Company's financial position. We cannot assure you that insurance held by the operator of any of our properties will be adequate to cover losses or liabilities.
Environmental and other regulatory requirements may delay production and development of our resource interests.
The current or future operations of the Company, including development activities and commencement of production on its properties, require permits from various governmental authorities and such operations will be subject to laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, safety and other matters. Companies engaged in the development and operation of natural resource properties and related facilities generally experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. There can be no assurance that approvals and permits required to commence production on its properties will be obtained. Additional permits and studies, which may include environmental impact studies conducted before permits can be obtained, may be necessary prior to operation of the properties in which the Company acquires interests and there can be no assurance that the operator of these interests or the Company will be able to obtain or maintain all necessary permits that may be required to commence construction, development or operation of oil and gas extraction facilities at these properties on terms which enable operations to be conducted at economically justifiable costs.
Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions against the operator of any of our resource properties or us, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions.
Conducting business in foreign countries subjects us to special risks, which we have no control over.
Company’s current business strategy may involve participation in overseas projects in the resource sector. Consequently, the Company will be subject to certain risks associated with foreign ownership, including currency fluctuations, inflation, political instability and political risk. Oil, gas and other resource exploration and production activities in foreign countries may be affected in varying degrees by political stability and government regulations relating to the resource industry. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, restriction of earnings, taxation laws, expropriation of property, environmental legislation, water use and workplace safety.
Our short term investments are susceptible to market fluctuations and other risks.
We have over US $5,000,000 in cash (US $2,441,100) and marketable securities ($US 3,022,470) as of September 30, 2006. Our marketable securities are primarily securities of publicly held Canadian corporations. The value of these securities is subject to market fluctuations as well as the specific risks of each particular issuer. Although we believe we have diversified our portfolio, we may lose some of our original investment in the event that an investment does not perform as anticipated.
We will need to raise additional funds in the future, which may not be available to us.
The Company is currently without a source of revenue from operations and upon the investment of its current cash and liquidity resources will most likely be required to issue additional securities to finance its operations and the development of its projects. We may not be able to obtain additional financing on acceptable terms or at all. Failure to obtain additional financing on a timely basis could cause the Company to sell or forfeit its interest in its properties and reduce or terminate its operations on such properties or discontinue operations entirely.
There is a substantial risk of dilution through possible equity financings and stock options.
Any equity or debt financings, if available at all, may cause dilution to our then-existing shareholders. If additional funds are raised through the issuance of equity securities, the net tangible book value per share of our common shares would decrease and the percentage ownership of then current shareholders would be diluted.
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Additionally, the Company may in the future grant to some or all of its own and its subsidiaries' directors, officers, insiders and key consultants options to purchase the Company's common shares as non-cash incentives to those people. Such options may be granted at exercise prices equal to market prices at time when the public market is depressed or below fair market value. To the extent that significant numbers of such options may be granted and exercised, the interests of the then existing shareholders of the Company may be subject to additional dilution.
We are dependent upon our key managerial consultants, the loss of which would negatively affect our business.
5
Our performance depends on a small number of key managerial consultants. In particular, we believe our success is highly dependent upon the services of our Chief Executive Officer and Chief Financial Officer, Mr. Kam Shah, as well as Mr. Terence Robinson both of whom are consultants and who have been significantly involved in locating and negotiating our resource investments. Loss of either of their services could negatively affect our business.
Our officers and directors reside outside of the United States and there is a risk that civil liabilities and judgments may be unenforceable.
The Company and its officers and all but one of its directors are residents of countries other than the United States, and most of the Company's assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or enforce in the United States against such persons judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of United States federal securities laws or state securities laws.
Risk Factors Relating to Our Common Shares
Our share price has been volatile in the past and may decline in the future.
In recent years, the securities markets in Canada and the United States have experienced a high level of price and volume volatility, and the market prices of securities of many companies, particularly small mineral exploration companies like the Company, have experienced wide fluctuations which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. Our shares may continue to experience significant market price and volume fluctuations in the future in response to factors, which are beyond our control.
Shares eligible for future sale may depress our stock price.
At August 15, 2006, we had approximately 27,300,000 shares of common stock outstanding of which approximately 11,000,000 are restricted securities under Rule 144 promulgated under the Securities Act. We also have approximately 13,000,000 and 4,800,000 shares of commons stock issuable under presently exercisable warrants and options, respectively, of which 1,800,000 and 4,800,000 shares, respectively, are registered pursuant to an effective registration statement under the Act and are eligible for resale in the public market. Sales of shares of common stock pursuant to an effective registration statement or under Rule 144 or another exemption under the Act could have a material adverse effect on the price of our common stock and could impair our ability to raise additional capital through the sale of equity securities.
We do not intend to pay dividends.
All of the Company's available funds will be invested to finance the growth of the Company's business and therefore investors cannot expect and should not anticipate receiving a dividend on the Company's common shares in the foreseeable future.
Our common stock is subject to penny stock rules.
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The capital stock of the Company would be classified as “penny stock” as defined in Reg. § 240.3a51-1 promulgated under the Securities Exchange Act of 1934 (the “1934 Act”). In response to perceived abuse in the penny stock market generally, the 1934 Act was amended in 1990 to add new requirements in connection with penny stocks. In connection with effecting any transaction in a penny stock, a broker or dealer must give the customer a written risk disclosure document that (a) describes the nature and level of risk in the market for penny stocks in both public offerings and secondary trading, (b) describes the broker’s or dealer’s duties to the customer and the rights and remedies available to such customer with respect to violations of such duties, (c) describes the dealer market, including “bid” and “ask” prices for penny stock and the significance of the sp read between the bid and ask prices, (d) contains a toll-free telephone number for inquiries on disciplinary histories of brokers and dealers, and (e) define significant terms used in the disclosure document or the conduct of trading in penny stocks. In addition, the broker-dealer must provide to a penny stock customer a written monthly account statement that discloses the identity and number of shares of each penny stock held in the customer’s account, and the estimated market value of such shares. The extensive disclosure and other broker-dealer compliance related to penny stocks may result in reducing the level of trading activity in the secondary market for such stocks, thus limiting the ability of the holder to sell such stock.
Your rights and responsibilities as a shareholder will be governed by Canadian law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.
We are incorporated under Ontario Canada law. The rights and responsibilities of holders of our shares are governed by our memorandum of association, our articles of association and by Canadian law. These rights and responsibilities may differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
Changing regulation of corporate governance and public disclosure can cause additional expenses and failure to comply may adversely affect our reputation and the value of our securities.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and new and changing provisions of Canadian securities laws, are creating uncertainty because of the lack of specificity and varying interpretations of the rules. As a result, the application of the rules may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generati ng activities to compliance activities. Any failure to comply with applicable laws may materially adversely affect our reputation and the value of our securities.
If we fail to comply with Section 404 of the Sarbanes-Oxley Act of 2002, our reputation and the value of our securities may be adversely affected.
Beginning with our annual report for the year ending March 31, 2007, Section 404 of the Sarbanes-Oxley Act of 2002 will require us to include an internal control report of management with our annual report on Form 20-F, which is to include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. That report will also be required to include a statement that our independent auditors have issued an attestation report on management’s assessment of our internal control over financial reporting. In order to achieve compliance with Section 404 within the prescribed period, management is in the process of adopting a detailed project work plan to assess the adequacy of our internal control over financial reporting, validate through testing that controls are functioning as documented, remediate any control weaknesses that may be identified, and implement a continuous reporting and improvement process for internal control over financial reporting. Any failure to comply with Section 404, including issuing the required management report and obtaining the attestation report on management’s assessment from our independent auditors, may materially adversely affect our reputation and the value of our securities.
If we lose our status as a foreign private issuer, our compliance costs will increase.
We are a "foreign private issuer" as defined under the Exchange Act. As a result, our proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and transactions in our equity securities by our officers and directors are exempt from Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. If we lose our status as a foreign private issuer by our election or otherwise, we will be subject to additional reporting obligations under the Exchange Act which could increase our cost of operations.
CAPITALIZATION AND INDEBTEDNESS
The following sets forth on an unaudited, consolidated Canadian GAAP basis (a) the Company's actual capitalization and indebtedness as of September 30, 2006, and (b) the Company's capitalization and indebtedness as of September 30, 2006 as adjusted to give effect to the exercise of 11,440,000 warrants by the selling shareholders for gross proceeds of $4,425,621. No adjustment has been made for actual or estimated costs the Company may incur with respect to this offering. There is no assurance that any or all of the warrants will be exercised by the selling shareholders.
MARKETS
Our shares trade on the NASDAQ Over-the-Counter Bulletin Board (OTCBB) under the symbol BNTNF (formerly DCHK). The Company's shares traded during the periods and at the prices set out below. The Company effected a 7:1 reverse stock split on April 21, 2003.
The following table outlines the annual high and low market prices for the five most recent fiscal years:
Fiscal year ended March 31 | High In US $ | Low In US$ |
2006 | 1.51 | 0.20 |
2005 | 2.15 | 0.33 |
2004 | 2.47 | 0.21 |
2003 | 2.38 | 0.21 |
2002 | 4.83 | 0.28 |
The following table outlines the high and low market prices for each quarter of the two most recent full financial years and subsequent periods:
Fiscal Quarter ended | High | Low |
| In US$ | In US$ |
September 30, 2006 | 0.60 | 0.25 |
June 30, 2006 | 0.75 | 0.48 |
March 31, 2006 | 0.66 | 0.23 |
December 31, 2005 | 1.45 | 0.20 |
September 30, 2005 | 1.53 | 0.68 |
June 30, 2005 | 1.05 | 0.58 |
March 31, 2005 | 1.62 | 0.75 |
December 31, 2004 | 2.15 | 0.48 |
September 30, 2004 | 1.13 | 0.33 |
June 30, 2004 | 2.05 | 0.90 |
The following table outlines the high and low market prices for each of the most recent six months:
Month | High | Low |
| In US$ | In US$ |
October 31, 2006 | 0.37 | 0.28 |
September 30, 2006 | 0.41 | 0.25 |
August 31, 2006 | 0.37 | 0.30 |
July 31, 2006 | 0.61 | 0.32 |
June 30, 2006 | 0.74 | 0.47 |
May 31, 2006 | 0.78 | 0.52 |
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INFORMATION ON OUTSTANDING SHARES
The number of shares outstanding before and after this offering is set forth below:
-
Common shares outstanding before the offering:
27,300,203
-
Common shares to be outstanding after the offering
38,740,203
assuming exercise of all the warrants registered hereby
The number set forth above for the common shares outstanding before this offering is the number of shares outstanding as at August 15, 2006, excluding the common shares which may be issued upon exercise of the warrants being offered for resale by this prospectus. The numbers set forth above excludes 1,721,960 warrants exercisable at US$1 per share issued under our 2003 private placement and included in a registration statement effective on July 21, 2005, 4,795,000 common shares that are issuable upon the exercise of outstanding options issued under our 1999 Consultants Stock Option Plan and 2003 Consultants Stock Option Plan. These options are exercisable at prices ranging from $0.35 to $1.00 per share, with a weighted average exercise price of $0.48 per share.
REASONS FOR THE REGISTRATION AND USE OF PROCEEDS
This prospectus relates to the registration of 21,840,000 of our common shares for resale by the selling shareholders. On April 16, 2006, we completed a private placement of 10,400,000 units at US$0.25. Each unit was comprised of one of our common shares and a warrant for the purchase of one additional common share at a price of US$0.35 within twenty-four months of the date of issuance of the unit. In addition, we also issued 1,040,000 warrants as finder’s fee for the purchase of one additional common share at a price of US$0.35 within twenty-four months of the date of issuance to Current Capital Corp., a Canadian corporation.
Current Capital is owned 100% by Mr. John Robinson. Mr. Robinson is a selling shareholder with respect to 4,444,000 shares and 1,040,000 warrant shares owned by Current Capital Corp. Mr. Robinson owns 18% of our outstanding capital stock as of September 30, 2006. Current Capital is a media relations company and provides services to us. Mr. Kam Shah, our Chief Executive Officer and Chief Financial Officer, and also a selling shareholder, provides independent consulting services to Current Capital.
All of the warrants are currently exercisable and expire at various times beginning March 2008 and ending April 2008, unless extended by us. None of the warrants have been exercised. We are registering the shares to permit the selling shareholders to dispose of the shares from time to time. We conducted our private placement upon reliance on an exemption from registration under Regulation S and Regulation D of the Securities Act of 1993.
We will not receive any of the proceeds from the sale by the selling shareholders of our common shares. We will, however, receive the proceeds from the exercise of the warrants if and when they are exercised.
SELLING SHAREHOLDERS
The table below lists the selling shareholders who may resell common shares pursuant to this prospectus and other information regarding the beneficial ownership of the shares and shares issuable upon exercise of warrants received in the private placement.
The second and third columns list the number and percentage of shares beneficially owned by each selling shareholder as of the date of this prospectus.
The fourth column lists the number of shares being offered by this prospectus by each of the selling shareholders.
The fifth and sixth columns lists the number and percentage of shares owned after this offering assuming the sale of all of the shares offered by the selling shareholders pursuant to this prospectus. The selling shareholders may sell all, some or none of their shares in this offering.
The term “beneficial ownership” includes shares over which the indicated beneficial owner exercises voting and/or investment power. The rules also deem common shares subject to convertible securities currently exercisable or exercisable within 60 days to be outstanding for purposes of computing the percentage ownership of the person holding the options or warrants, but they do not deem these common shares to be outstanding for purposes of computing the percentage ownership of any other person. The applicable percentage of ownership is based on 27,300,203 common shares outstanding as of August 15, 2006, together with any applicable convertible securities for that shareholder.
Except as otherwise indicated, we believe the beneficial owner of the common shares listed below, based on information furnished by them, has sole voting and investment power over the number of shares listed opposite its name.
Except as indicated below, to our knowledge, none of the selling shareholders is a director, officer or consultant of ours or holder of 10% or more of our shares, or a broker-dealer or an affiliate of a broker-dealer.
* Less than 1%
(1) Includes 100,000 shares issuable upon the exercise of currently exercisable warrants.
(2) Includes 100,000 shares issuable upon the exercise of currently exercisable warrants. Mr. Lis is an affiliate of a broker-dealer and has represented to us that he purchased the securities for investment purposes, in the ordinary course of business and, at the time of the purchase, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.
(3) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants. Mr. Kimel is an affiliate of a broker-dealer and has represented to us that he purchased the securities for investment purposes, in the ordinary course of business and, at the time of the purchase, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.
(4) Includes 100,000 shares issuable upon the exercise of currently exercisable warrants.
(5) Represents 5,112,000 securities owned by Pinetree Resource Partnership for which Mr. Inwentash has shared voting and shared investment control with the corporate partners of the partnership namely, Genevest Inc., Emerald Capital Corp and Pinetree Capital Corp., and 2,500,000 securities for which Mr. Inwentash has sole voting and/or investment control. Based on a Schedule 13D/A filed on May 5, 2006 by Pinetree Resource Partnership, Mr. Inwentash, Genevest Inc., Emerald Capital Corp and Pinetree Capital Corp. Includes 3,000,000 shares issuable upon the exercise of currently exercisable warrants.
(6) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants.
(7) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants.
(8) Represents securities owned by 1697059 Ontario Inc. for which Mr. Lacaria has sole voting and/or investment control. Includes 1,000,000 shares issuable upon the exercise of currently exercisable warrants.
(9) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants.
(10) Includes 500,000 shares issuable upon the exercise of currently exercisable warrants.
(11) Represents securities owned by Jennifer A. Mackenzie for which Mr. Palmer, her husband, has sole voting and/or investment control. Includes 200,000 shares issuable upon the exercise of currently exercisable warrants.
(12) Includes 100,000 shares issuable upon the exercise of currently exercisable warrants.
(13) Represents securities owned by Hampton Securities Inc. for which Mr. Deeb has sole voting and/or investment control. Includes 400,000 shares issuable upon the exercise of currently exercisable warrants. Hampton Securities Inc. has represented to us that it purchased the securities for investment purposes, in the ordinary course of business and, at the time of the purchase, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.
(14) Represents 4,440,000 securities owned by Current Capital Corp. for which Mr. Robinson has sole voting and investment control. Includes 3,599,103 shares issuable upon the exercise of currently exercisable warrants. Mr. Robinson is a key consultant to us and sole shareholder of Current Capital Corp. which provides us with media and investors relations.
(15) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants. Mr. Shah is our Chief Executive Officer, Chief Financial Officer and a director. He also provides accounting services to Current Capital Corp., as an independent consultant.
(16) Includes 200,000 shares issuable upon the exercise of currently exercisable warrants.
(17) Represents securities owned by Gryphon Bond Fund Ltd. for which Mr. Crystal has sole voting and/or investment control. Includes 1,000,000 shares issuable upon the exercise of currently exercisable warrants.
(18) Represents securities owned by TBH Investments Ltd., an affiliate of a broker-dealer, for which Mr. Davis has sole voting and/or investment control. Includes 1,000,000 shares issuable upon the exercise of currently exercisable warrants. TBH Investments has represented to us that it purchased the securities for investment purposes, in the ordinary course of business and, at the time of the purchase, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.
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PLAN OF DISTRIBUTION
We are registering the shares offered hereby on behalf of the selling shareholders. Selling shareholders include donees, pledgees, transferees or other successors-in-interest selling shares received after the date of this prospectus from a named selling shareholder as a gift, pledge, partnership distribution or other similar transfer. All costs, expenses and fees in connection with the registration of the shares offered by this prospectus will be borne by us other than brokerage commissions and similar selling expenses, if any, attributable to the sale of shares which will be borne by the selling shareholders.
Sales of shares may be effected by selling shareholders from time to time in one or more types of transactions (which may include block transactions) including,
·
on the OTCBB at prevailing market prices;
·
in negotiated transactions;
·
through put or call options transactions relating to the shares;
·
through short sales of shares (including the closing of any open short position), or through transactions in options, swaps or other derivatives;
or a combination of these methods of sale, or through any lawful manner, at market prices prevailing at the time of sale, or at negotiated prices. These transactions may or may not involve brokers or dealers. The selling shareholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their securities, nor is there an underwriter or coordinating broker acting in connection with the proposed sale of the shares offered hereby by the selling shareholders.
The selling shareholders may effect these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as agents or principals. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling shareholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal, or both. Compensation to a particular broker-dealer might be in excess of customary brokerage commissions.
The selling shareholders and any broker-dealers that act in connection with the sale of securities might be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act, and any commissions received by these broker-dealers and any profit on the resale of the common shares sold by them while acting as principals might be deemed to be underwriting discounts or commissions under the Securities Act. We have not agreed to indemnify any selling shareholder against specified liabilities, including liabilities arising under the Securities Act. The selling shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares against certain liabilities, including liabilities arising under the Securities Act.
Because selling shareholders may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act, the selling shareholders will be subject to the prospectus delivery requirements of the Securities Act.
The selling shareholders also may resell all or a portion of the securities in open market transactions in reliance upon Rule 144 under the Securities Act, provided they meet the criteria and conform to the requirements of that rule or another exemption under the Securities Act.
If we are notified by a selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares offered hereby through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing:
·
the name of each such selling shareholder and of the participating broker-dealer(s);
·
the number of shares involved;
·
the initial price at which such shares were sold;
·
the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable;
·
that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and
·
other facts material to the transaction.
EXPENSES ASSOCIATED WITH THE REGISTRATION
We have agreed to bear all expenses relating to the registration of the shares covered by this prospectus. We estimate these expenses to be approximately US$12,500, which include the following categories of expenses:
SEC registration fee | $ 817.91 |
Printing and photocopying fees | 150.00 |
Legal fees and expenses | 10,000.00 |
Accounting fees and expenses | |
Transfer agent and registrar fees and expenses | 1,000.00 |
Miscellaneous expenses | 500.00 |
-------------------------- | |
Total Expenses | US $ 12,467.91 |
EXPERTS
Our consolidated financial statements included in our Form 20-F for the year ended March 31, 2006 were audited by Schwartz Levitsky Feldman llp, independent registered public accounting firm as set forth in their report thereon and incorporated in this prospectus by reference and for each of the two previous years in the three year period ended March 31, 2006 had been audited by Sloan Partners LLP, independent registered public accounting firm. Such consolidated financial statements are incorporated by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the registration of the shares hereunder will be passed upon for us by Messerli & Kramer P.A., our U.S. securities counsel.
INCORPORATlON OF DOCUMENTS BY REFERENCE
The SEC allows the Company to "incorporate by reference" the information it files with the SEC into this prospectus. This means that the Company can disclose important information to you by referring you to other documents, which we have filed or will file with the SEC. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the SEC will update and supersede information previously filed. The Company incorporates by reference the documents listed below:
a)
Our annual report on Form 20-F filed on August 29, 2006 for the fiscal year ended March 31, 2006;
b)
Our current reports on Form 6-K filed on September 1, 2006;
c)
All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the annual report incorporated by reference herein pursuant to (a) above;
d)
The description of our securities contained in our registration statement on Form 20-F filed with the Securities and Exchange Commission on June 12, 2000, including any amendment or report filed for the purpose of updating such description.
Prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, the Company also incorporates by reference all of its subsequent annual reports filed with the SEC on Form 20-F and all of its subsequent reports on Form 6-K under the Exchange Act submitted to the SEC that it specifically identifies in such form as being incorporated by reference into this prospectus.
Certain statements in and portions of this prospectus update and replace information in the above listed documents incorporated by reference. Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus or the above listed documents.
The Company shall undertake to provide without charge to each person to whom a copy of this prospectus has been delivered, upon the written or oral request of any such person to us, a copy of any or all of the documents referred to above that have been or may be incorporated into this prospectus by reference, including exhibits to such documents, unless such exhibits are specifically incorporated by reference to such documents. Requests for such copies should be directed to our Chief Financial Officer, Bontan Corporation Inc. at 47 Avenue Road, Suite 200, Toronto, Ontario M5R 2G3, Canada, Tel: 416-929-1806. Our SEC filings are also available over the Internet at the SEC's website at www.sec.gov.
You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. The Company has not authorized anyone else to provide you with different information. This prospectus is an offer to sell or to buy only the securities referred to in this prospectus, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus or any prospectus supplement is current only as of the date on the front page of those documents. Also, you should not assume that there has been no change in our affairs since the date of this prospectus or any applicable prospectus supplement.
WHERE YOU CAN GET MORE INFORMATION
This prospectus is a part of a registration statement on Form F-3, which we filed with the Securities and Exchange Commission under the Securities Act of 1933. As permitted by the rules and regulations of the SEC, this prospectus does not contain all of the information contained in the registration statement and the exhibits and schedules thereto. As such we make reference in this prospectus to the registration statement and to the exhibits and schedules thereto. For further information about us and about the securities we hereby offer, you should consult the registration statement and the exhibits and schedules thereto. You should be aware that statements contained in this prospectus concerning the provisions of any documents filed as an exhibit to the registration statement or otherwise filed with the SEC are not necessarily complete, and in each instance reference is made to the copy of such document so filed. Each su ch statement is qualified in its entirety by such reference.
We file annual and special reports and other information with the SEC. These filings contain important information, which does not appear in this prospectus. For further information about us, you may read and copy these filings at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330, and may obtain copies of our filings from the public reference room by calling (202) 942-8090, or at the SEC’s website at www.sec.gov.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
As described in the registration statement of which this prospectus forms a part, the Company's articles of association and certain provisions of Canadian law contain provisions relating to the ability of our officers and directors to be indemnified by the Company for costs, charges, expenses, losses and other liabilities which are sustained or incurred in the performance of the officer’s or director’s duties for the Company. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the Company's directors, officers and controlling persons pursuant to the charter provision, by-law, contract, arrangements, statute or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
9
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Province of Ontario and the majority of our assets and operations are located outside the United States. It may not be possible for holders to enforce outside the United States judgments against us obtained in the United States in any such actions, including actions predicated upon the civil liability provisions of the United States federal securities laws. In addition, certain of our directors and officers are residents of Canada, and all or a substantial portion of the assets of those directors and officers are or may be located outside the United States. As a result, it may not be possible for holders to effect service of process within the United States upon those persons, or to enforce against them judgments obtained in the United States courts, including judgments predicated upon the civil liability provisions of the United States federal and state securities laws.
10
BONTAN CORPORATION INC.
21,840,000 SHARES
PROSPECTUS
You should rely only on the information contained in this prospectus or incorporated by reference herein. We have not authorized anyone to provide you with different information and you should not rely on any such different information. No offer to sell or buy any of the securities covered by this prospectus is being made in any state or jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date that appears below.
__________, 2006
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 8. Indemnification of Directors and Officers
Under the Business Corporations Act (Ontario) (the “Act”), the Company may indemnify a present or former director or officer or a person who acts or acted at the Company’s request as a director or officer or of another corporation of which the Company is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of being or having been such a director or officer if the director or officer acted honestly and in good faith with a view to the best interests of the Company and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. Such indemnification ma y be made in connection with an action by or on behalf of the Company or such other corporation only with court approval. A director or officer is entitled to indemnification from the Company as a matter of right in respects of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative proceeding to which he is a party by reason of being or having been a director or officer of such corporation if he was substantially successful on the merits and fulfilled the conditions set forth above.
The by-laws of the Company provide that each director, each officer, each former director, each former officer and each person who acts or acted at the Company’s request as a director or officer or of a body corporate of which the Company is or was a shareholder or creditor, and his heirs and legal representatives, shall be indemnified and saved harmless by the Company from and against all costs, charges and expenses, including without limitation, each amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which his is made a party by reason or being or having been a director or officer of the Company or such body corporation, if he acted honestly and in good faith with a view to the Company’s best interests and in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty he had reasonable grounds for believing his conduct was lawful. In certain circumstances the Company has provided its Directors or its subsidiaries’ Directors with a written indemnification confirming the indemnification available under its by-laws.
The Company currently does not maintain directors’ and officers’ liability insurance.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the U.S. Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933, as amended and is therefore unenforceable.
Item 9. Exhibits.
Exhibit Number | Description of Documents |
4.1 | Form of Common Share Certificate (Incorporated by reference to Exhibit 1(viii) to the Company’s Annual Report on Form 20-F filed on September 23, 2003). |
4.2 | Form of Private Placement Agreement for February 2006 |
4.3 | Form of Share purchase warrants regarding February 2006 private placement. |
5.1 | Opinion of Messerli & Kramer P.A. as to the legality of the common shares being registered hereby. |
23.1 | Consent of Schwartz Levitsky Feldman LLP |
23.2 | Consent of Sloan Partners LLP |
23.3 | Consent of Messerli & Kramer P.A. (Included in their opinion filed as Exhibit 5.1 hereto). |
24.1 | Power of Attorney (included on signature page of this Registration Statement). |
Item 10. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports file d with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
(5)
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(b)
The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of our annual report pursuant to Section 13(a) or Section 15(b) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, on the 22nd day of November, 2006.
Bontan Corporation Inc.
By: /s/ Kam Shah
----------------------------------
Name: Kam Shah
Title: Chief Executive Officer and Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Kam Shah, as his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead in any and all capacities, to sign this Registration Statement and any and all amendments thereto (including post-effective amendments and registration statements filed pursuant to Rule 462(b) under the Securities Act of 1933 and otherwise), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature
Title
------------------------------------- --------------------------------------
By: /s/ Kam Shah
Director, Chief Executive Officer,
-------------------------------
Chief Financial Officer
Name: Kam Shah
Date: November 22, 2006
By: /s/ Dean Bradley
Director
-------------------------------
Name: Dean Bradley
Date: November 22, 2006
By: /s/ Damian Lee
Director
-------------------------------
Name: Damian Lee
Date: November 22, 2006
EXHIBIT INDEX
Exhibit Number | Description of Documents |
4.1 | Form of Common Share Certificate (Incorporated by reference to Exhibit 1(viii) to the Company’s Annual Report on Form 20-F filed on September 23, 2003). |
4.2 | Form of Private Placement Agreement for February 2006 |
4.3 | Form of Share purchase warrants regarding February 2006 private placement. |
5.1 | Opinion of Messerli & Kramer P.A. as to the legality of the common shares being registered hereby. |
23.1 | Consent of Schwartz Levitsky Feldman LLP. |
23.2 | Consent of Sloan Partners LLP |
23.3 | Consent of Messerli & Kramer P.A. (Included in their opinion filed as Exhibit 5.1 hereto). |
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| Bontan Corporation Inc. 47 Avenue Road, Suite 200 Toronto, Ontario, Canada M5R 2G3 T: 416-929-1806 F: 416-361-6228 |
![[privateplacementagreement002.gif]](https://cdn.kscope.io/67fa4908126f822a1f2d3df385f57445-privateplacementagreement002.gif)
BONTAN CORPORATION INC.
- and -
PRIVATE PLACEE
PRIVATE PLACEMENT AGREEMENT
_____________ UNITS
Certificate No.: _________
| Bontan Corporation Inc. 47 Avenue Road, Suite 200 Toronto, Ontario, Canada M5R 2G3 T: 416-929-1806 F: 416-361-6228 |
![[privateplacementagreement004.gif]](https://cdn.kscope.io/67fa4908126f822a1f2d3df385f57445-privateplacementagreement004.gif)
PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT
No prospectus, registration statement or similar offering document will be filed with any applicable securities regulatory authority in any jurisdiction with respect to securities issued by BONTAN and sold under the Agreement.
THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (the “Agreement”) made this ______day of _____, 2006
BETWEEN:
BONTAN CORPORATION INC.
(herein called “BONTAN” )
OF THE FIRST PART
- and -
__________________________
(herein called "Private Placee")
OF THE SECOND PART
WHEREAS BONTAN is a reporting issuer in the Province of Ontario and in the United States;
AND WHEREAS BONTAN wishes to make a private placement of up to 10,400,000 units at a price of $0.25US Funds per unit, each unit comprised of one (1) BONTAN common share (a “Common Share”) and one BONTAN share purchase warrant (a “Warrant”), each such warrant entitling the Private Placee to purchase one (1) further BONTAN common share (a “Warrant Share”) at a price of $0.35US Funds until 5:00 p.m. Toronto time on the date which is twenty Four (24) months from the Closing Date (as defined herein);
AND WHEREAS the Private Placee has informed itself as to BONTAN's state of affairs and its assets and wishes to make a private placement investment in BONTAN securities by acquiring 200,000 units (the "Purchased Units”) of BONTAN;
1
AND WHEREAS the Purchased Units and the underlying Common Shares, Warrants and Warrant Shares are hereafter referred to collectively as the “Securities”;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby covenant and agree each with the other as follows:
A.
SUBSCRIPTION
1.
The recitals set out above shall form an integral part of this Agreement.
2.
The Private Placee hereby subscribes for and agrees to purchase from BONTAN the following:
___________ Purchased Units of BONTAN. The price of the Purchased Units is $0.25 US Funds each or $_____________ US in the aggregate (the "Purchase Price").
Each unit is comprised of one (1) BONTAN common share and one BONTAN share purchase warrant, each such whole warrant entitling the Private Placee to purchase one (1) further BONTAN common share at the price of $0.35 US Funds until 5:00 p.m. Toronto time on the date which is twenty four (24) months from the closing date.
The Warrants shall be non-transferable by it except in accordance with the provisions of the securities legislation of the jurisdiction in which such transfer takes place, and shall expire and be of no value if unexercised by the time prescribed. The Warrants shall be in the form of the draft Warrant Certificate annexed hereto as Schedule "A", and forming a part hereof.
3.
The Private Placee shall pay the Purchase Price to BONTAN by a wire transfer to BONTAN at the following address:
Bontan Corporation Inc.
Bank of Montreal, Main Branch Toronto
First Canadian Place, Toronto, ON M5X 1A3 Canada
Account # 4658-156, Bank Code 001, Branch Code 00022
Bank Phone # 416-867-5050
Or by a certified cheque to be delivered to the BONTAN’s corporate office at 47 Avenue Road, Suite 200, Toronto, Ontario M5R 2G3, Canada.
The date of receipt of the full amount of the Purchase Price shall be deemed to be the closing date (the “Closing Date”) of this transaction. The time of closing (the “Time of Closing”) shall be deemed to be 4:00 p.m. on the Closing Date. The Securities shall be deemed acquired as of the Time of Closing.
4.
The parties hereto acknowledge and agree that the Securities are not qualified for sale in Canada (or any province thereof) of the United States of America (“USA”) and may not be offered or sold, directly or indirectly, in Canada (or any province thereof) or the USA or to a Canadian or USA resident, except as permitted in accordance with the provisions of the securities legislation of the respective jurisdictions.
B.
PRIVATE PLACEE’S ACKNOWLEDGEMENTS AND AGREEMENTS
The Private Placee understands, acknowledges and agrees that:
1.
This subscription may be accepted or rejected in whole or in part by BONTAN, in its sole discretion.
2.
Except as provided under applicable securities laws, this subscription is and shall be irrevocable except that (i) the Private Placee’s execution and delivery of this Agreement will not constitute an agreement between BONTAN and the Private Placee until this Agreement is accepted on behalf on BONTAN and, if not so accepted, the Private Placee’s subscription and obligations hereunder will terminate and (ii) the Private Placee can, at any time prior to acceptance of this Agreement, request in writing that he/she or it be released from his/her or its obligations hereunder (and BONTAN may, but need not, in its discretion, elect to release the Private Placee from his/her or its subscription and from such obligations).
THE SECURITIES HAVE NOT BEEN RECOMMENDED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE OR PROVINCIAL SECURITIES COMMISSION OR BY ANY STATE OR PROVINCIAL SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
3.
Private Placee has not been provided with, nor has it requested, nor does it have any need to receive, an offering memorandum or any similar document in connection with its subscription for the Securities, and the decision to execute this Agreement and to purchase the Securities has been based entirely upon publicly available information concerning BONTAN and not upon any verbal or other written representation as to fact or otherwise made by or on behalf of BONTAN or any officer, director, employee, agent or affiliate thereof.
4.
The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or the securities laws of any state, and that the Securities are being offered and sold to a limited number of investors who are non-U.S. persons in transactions not requiring registration under the U.S. Securities Act in accordance with Regulation S of the U.S. Securities Act; accordingly, the Securities are “restricted securities” within the meaning of Rule 144(a)(3) of the U.S. Securities Act.
5.
Because the Securities will not have been registered under the U.S. Securities Act, or applicable U.S. state securities laws, the Private Placee is aware that any re-sale inconsistent with the U.S. Securities Act may create liability on his or its part and/or the part of BONTAN, and agrees not to assign, sell, pledge, transfer or otherwise dispose of or transfer the Securities except in compliance with the U.S. Securities Act and applicable state securities laws. The Private Placee is also aware that any re-sale inconsistent with applicable securities laws in the province of Ontario (“Canadian Securities Laws”) may create liability on his or its part and/or the part of BONTAN, and agrees not to assign, sell, pledge, transfer or otherwise dispose of or transfer the Securities except in compliance with Canadian Securities Laws.
6.
Unless permitted under Canadian Securities legislation, the Private Placee shall not trade the Securities in the Province of Ontario before the date that is four months and one day after the Closing Date.
7.
Each certificate representing the Securities will bear a legend to the following effect:
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY SHALL NOT TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE CLOSING DATE.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, EXERCISED OR OTHERWISE TRANSFERRED ONLY (A) TO BONTAN CORPORATION INC. (THE “CORPORATION”) (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE CORPORATION BUT WHICH MAY BE CONDITIONAL ON DELIVERY OF A LEGAL OPINION IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”
8.
Provided that nothing herein shall limit the rights of BONTAN to register any or all of the
Securities, the Private Placee acknowledges that neither BONTAN nor any other representative on behalf of BONTAN has made any representations with respect to registration under the U.S. Securities Act or qualification under Canadian Securities Laws of the Securities and that no such registration is contemplated, that there can be no assurance that there will be any market for the Securities in the United States in the foreseeable future or any liquid market for four months, and that, as a result, the Private Placee may be required to bear the economic risk of his or its investment for an indefinite period of time under the U.S. Securities Act, or a period of four months and one day under the Canadian Securities Laws.
C.
BONTAN WARRANTIES AND REPRESENTATIONS
BONTAN hereby represents and warrants to the Private Placee as follows:
1.
BONTAN is a corporation duly organized and validly existing under the laws of the Province of Ontario, is duly qualified to carry on its business and is in good standing in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification, and has all requisite corporate power, authority and capacity to carry on its business as now conducted and to own, lease or operate its property and assets and to enter into, execute, deliver and perform its obligations under this Agreement.
2.
As of the date hereof, the authorized capital of BONTAN consists of an unlimited number of Common Shares.
3.
BONTAN is a “reporting issuer” in the Province of Ontario, and a “reporting foreign issuer” in the USA.
4.
All necessary corporate action has been taken by and on behalf of BONTAN to authorize the
creation, issuance and sale of the Securities and upon receipt of the purchase price therefore; such securities shall be issued as fully paid and non-assessable securities of BONTAN.
D.
PRIVATE PLACEE’S REPRESENTATIONS AND WARRANTIES
1.
The Private Placee is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act and/or rule 45-501 of the Ontario Securities Commission.
2.
If Private Placee is not an “accredited investor” as set forth in Section 1 above, the Private Placee is not a U.S. Person (as such term is defined in Regulation S of the U.S. Securities Act), is not acquiring the Securities for the account or benefit of any U.S. Person and is resident in the jurisdiction set forth in its address in this Agreement.
3.
The Private Placee is aware of BONTAN’s business affairs and financial condition and has had access to and has acquired sufficient information about BONTAN to reach an informed and knowledgeable decision to acquire the Securities. The Private Placee, understands that an investment in BONTAN includes a high degree or risk, has such knowledge and experience in financial and business matters, investments, securities and private placements as to be capable of evaluating the merits and risks of its investment in the Securities, is in a financial position to hold the Securities for an indefinite period of time, and is able to bear the economic risk of, and withstand a complete loss of such investment in the Securities.
4.
The Private Placee has been solely responsible for Private Placee’s (i) own due diligence investigation of BONTAN and its business, (ii) own analysis of the merits and risks of its investment made pursuant to this Agreement and (iii) own analysis of the terms of its investment.
5.
The Private Placee is purchasing the Securities for his/her or its own account as principal, for investment purposes only, and not with a view to any resale, distribution or other disposition of the Securities in violation of the U.S. Securities Act, or any other federal, state, or provincial law. The Private Placee understands that its acquisition of the Securities has not been registered under the U.S. Securities Act or registered or qualified under any state or provincial law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of the Private Placee's investment intent as expressed herein. Except as contemplated by this Agreement, the Private Placee has no present agreement, undertaking, arrangement, obligation or commitment providing for the disposition of the Securities. The Private Placee represents that it has not been organized, reorganized or recapitulated specifically for the purpose of investing in the Securities.
6.
The Private Placee understands that the subsequent transfer of any or all of the Securities will be restricted and Private Placee will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Securities except (i) to the Corporation, (ii) outside the United States in compliance with Regulation S under the U.S. Securities Act, (iii) in compliance with the exemption from registration under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in compliance with any applicable state securities laws, or (iv) with the prior written consent of the Corporation (which will be delivered promptly and will not be unreasonably withheld, but which may be conditional on delivery of an opinion of counsel in form and substance satisfactor y to the Corporation), pursuant to another exemption from registration under the U.S. Securities Act and in compliance with any applicable state securities laws, any or all of which may not be available to the Purchaser and the Company and its agents and counsel will be under no obligation to assist the Purchaser in complying with any rule or registering an offer, sale or other transfer of any of the Securities or in obtaining an exemption from such compliance or registration requirements
7.
The Private Placee shall exercise the Warrants in compliance with Regulation S of the U.S. Securities Act including delivering to BONTAN at the time of exercise a certificate certifying that Private Placee is not a U.S. Person and that the Warrant is not being exercised on behalf of a U.S. Person or an opinion of counsel satisfactory to BONTAN that the Warrant and the Warrant Shares delivered upon exercise thereof have been registered under the Securities Act or are exempt from the registration thereunder.
8.
The Private Placee is aware that the purchase and subsequent resale of the Securities may have tax consequences both in Canada and the United States, and is solely responsible for obtaining advice concerning the tax consequences of its investment in the Securities and is not relying on BONTAN for advice concerning such tax consequences.
9.
The certificates evidencing the Securities will be imprinted with legends in substantially the form provided in Subsection B.7 of this Agreement.
10.
If Private Placee is an individual, Private Placee has attained the age of majority and in every case Private Placee is legally competent to purchase the Securities, and execute the Agreement and take all actions required hereto.
11.
(i) The Private Placee has all requisite corporate or other power and capacity and has taken all requisite corporate or other action to execute and deliver this Agreement, to purchase the Securities to be purchased by it and to carry out and perform all of his, her or its obligations under this Agreement; and (ii) this Agreement constitutes the legal, valid and binding obligation of the Private Placee, enforceable against the Private Placee in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, receivership or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application.
12.
The foregoing representations, warranties and covenants are true as of the date of this Agreement and shall be true as of the date that BONTAN issues and sells the Securities to the Private Placee, the date Private Placee exercises the Warrant and the date BONTAN issues any Warrant Shares. If such representations and warranties shall not be true in any respect prior to any such date, the Private Placee will give prompt written notice of such fact to BONTAN.
E.
CONDITIONS TO CLOSING
BONTAN's obligation to sell and issue the Securities at the Closing is at the option of BONTAN, subject to the fulfillment or waiver of the following conditions:
1.
The representations made by the Private Placee and BONTAN herein shall be true and correct when made, and shall be true and correct on the Closing Date with the same force and effect as if they had been made on and as of each such date.
2.
All covenants, agreements and conditions contained in this Agreement to be performed by the Private Placee on or prior to the Closing Date shall have been performed or complied with in all material respects.
3.
All necessary regulatory approvals shall have been obtained by BONTAN.
4.
No proceeding challenging this Agreement or the transactions contemplated hereby, or seeking to prohibit, alter, prevent or materially delay the Closing, shall have been instituted or be pending before any court, arbitrator, governmental body, agency or official.
5.
The sale of Securities by BONTAN shall not be prohibited by any law or governmental order or regulation and shall not require any additional consent or approval other that the ones obtained by BONTAN.
6.
The issue and sale of the Securities is exempt from the requirement to file a prospectus and the requirement to deliver an offering memorandum under applicable securities laws.
7.
The delivery of a share certificate representing the Common Shares and the Warrant at the initial closing.
F.
MISCELLANEOUS
1. The terms of this Agreement may be waived or amended with the written consent of BONTAN and the Private Placee.
2. This Agreement shall be governed in all respects by and construed in accordance with the laws of the Province of Ontario without any regard to conflicts of laws principles.
3.
[Intentionally omitted.]
4.
The representations, warranties, covenants and agreements made in this Agreement shall survive any investigation made by BONTAN or the Private Placee and the Closing.
5.
The provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties to this Agreement. Notwithstanding the foregoing, the Private Placee shall not assign this Agreement or its rights hereunder without the prior written consent of BONTAN.
6.
This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects thereof.
7.
All notices and other communications required or permitted under this Agreement shall be effective upon receipt and shall be in writing and may be delivered in person, by telecopy, overnight delivery service or registered or certified United States or Canadian mail addressed to BONTAN or the Private Placee, as the case may be, at their respective addresses set forth in subsection 13 or at such other address as BONTAN or the Private Placee shall have furnished to the other party in writing. All notices and other communications shall be effective upon the earlier of actual receipt thereof by the person to whom notice is directed or (i) in the case of notices and communications sent by personal delivery or telecopy, one business day after such notice or communication arrives at the applicable address or was successfully sent to the applicable telecopy number, (ii) in the case of notices and communications sent by overnight delivery service, at noon (local time) on the second business day following the day such notice or communication was sent, and (iii) in the case of notices and communications sent by United States or Canadian mail seven days after such notice or communication shall have been deposited in the United States or Canadian mail.
8.
If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
9.
This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.
10.
Each party to this Agreement shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
11.
BONTAN and the Private Placee shall each bear its own costs and expenses incurred on its behalf with respect to this Agreement and the transactions contemplated hereby, including fees of legal counsel.
12.
Except as otherwise specified, all references to "dollars" or "$" in this Agreement (including the Exhibits attached hereto) shall be deemed to refer to United States dollars.
13.
a)
Name and Address of Private Placee
Name:
___________________________________
Address:
___________________________________
Attention:
___________________________________
Phone No.:
___________________________________
Contact:
___________________________________
Phone No.:
___________________________________
b)
In the event that the Private Placee is contracting hereunder on behalf of one or more disclosed principals, the name and address of each such disclosed principal is set forth below (if space is insufficient, attach a list):
Name:
________________________
Name: _______________________
Address: _______________________
Address: _____________________
c)
Registration of the certificates representing the common shares and warrants being acquired pursuant to this agreement should be made as follows (if space is insufficient, attach a list):
Registration
(Account reference: if applicable)
Name:
__________________________
Address:
__________________________
__________________________
__________________________
Contact Name: _________________________
Phone No:
__________________________
d)
The certificate representing the common shares and warrants being acquired pursuant to this agreement should:
be mailed to the registered holder at the address set forth in (C) above; or
be made available to be picked up at the principal office of BONTAN in Toronto, Ontario,' or
be mailed to the following person at the following address:
Contact:
______________________________________
Address:
______________________________________
______________________________________
Please check one box, failing which such certificates will be mailed to the registered holder as described above.
14.
This Agreement shall be binding upon and ensure to the benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate effective as of the date first above written.
SIGNED, SEALED AND DELIVERED
) BONTAN CORPORATION INC.
) Per:
)
) ________________________________
Kam Shah, CEO
) Per:
) _________________________________
(PRIVATE PLACEE)
Endnotes
2
| Bontan Corporation Inc. 47 Avenue Road, Suite 200 Toronto, Ontario, Canada M5R 2G3 T: 416-929-1806 F: 416-361-6228 |
![[warrantcertificate002.gif]](https://cdn.kscope.io/67fa4908126f822a1f2d3df385f57445-warrantcertificate002.gif)
Warrant Certificate No._________
No. of Warrants : _________
Void After 5:00 p.m. (Toronto time) on 5TH APRIL, 2008
WARRANT CERTIFICATE
FOR THE PURCHASE OF COMMON SHARES OF
BONTAN CORPORATION INC.
THIS IS TO CERTIFY THAT, for value received, __________________(the "Warrant Holder") shall have the right to purchase from BONTAN CORPORATION INC. (the "BONTAN"), upon and subject to the terms and conditions hereinafter stated in this certificate (the "Warrant Certificate") one fully paid and non-assessable common share of BONTAN for each one (1) warrant specified above under "No. of Warrants" at the price of $0.35 US Funds per common share in lawful money of the United States until 5:00 p.m. Toronto time on 5TH APRIL, 2008.
The right to purchase common shares of BONTAN may only be exercised by the Warrant Holder within the time hereinbefore set out by: (a) duly completing and executing the subscription form attached hereto, in the manner therein indicated; (b) surrendering this Warrant Certificate to BONTAN at 47 Avenue Road, Suite 200, Toronto, Ontario M5R 2G3; and (c) paying the appropriate purchase price for the common shares of BONTAN subscribed for by a wire transfer to the following account of BONTAN.
Bontan Corporation Inc.
Bank of Montreal, Main Branch Toronto, First Canadian Place, Toronto ON M5X 1A3 Canada
Account # 4658-156, bank code 001, Branch code 00022
Bank Phone # 416-867-5050
Or by a certified cheque to be delivered to the BONTAN’s corporate office at 47 Avenue Road, Suite 200, Toronto, Ontario M5R 2G3, Canada.
Upon surrender and payment, BONTAN will issue to the Warrant Holder the number of common shares subscribed for. Within five business days of surrender and payment BONTAN will mail to the Warrant Holder a certificate evidencing the common shares subscribed for. If the Warrant Holder subscribes for a lesser number of common shares than the number of shares permitted by this Warrant Certificate, BONTAN shall forthwith cause to be delivered to the Warrant Holder a further warrant certificate in respect of the common shares referred to in this Warrant Certificate but not subscribed for.
Save and except in the case of the issuance of additional shares of BONTAN for consideration, if the issued and outstanding shares of BONTAN are changed by a subdivision, consolidation, reduction in capital or by any other capital reorganization or reclassification of the capital stock of BONTAN, or consolidation or merger of BONTAN with another corporation shall be effected, then, the warrants herein shall be adjusted and lawful and adequate provision shall be made whereby the Warrant Holder hereof shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions specified in this warrant certificate and in lieu of the shares of BONTAN immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby, such shares of stock, securities or assets as may be issued or payable with respect to or in exchange for a number of outstandin g shares equal to the number of shares of such stock immediately theretofore purchasable and receivable upon the exercise of the warrants represented hereby had such reorganization, reclassification, consolidation or merger not taken place, and in any such case appropriate provision shall be made with respect to the rights and interest of the Warrant Holder to the end that the provisions hereof (including without limitation provisions for adjustments of the exercise price of the warrants herein and of the number of shares purchasable upon conversion of the warrants herein) shall thereafter be applicable, as nearly as may be in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of the warrants herein.
THE WARRANTS AND THE SECURITIES UNDERLYING THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD, EXERCISED OR OTHERWISE TRANSFERRED ONLY (A) TO BONTAN CORPORATION INC. (THE “CORPORATION”) (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (C) IN COMPLIANCE WITH AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) WITH THE PRIOR WRITTEN CONSENT OF THE CORPORATION BUT WHICH MAY BE CONDITIONAL ON DELIVERY OF A LEGAL OPINION IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL NOT TRADE THE WARRANT OR COMMON SHARES ISSUABLE ON EXERCISE THEREOF IN THE PROVINCE OF ONTARIO BEFORE THE DATE THAT IS FOUR MONTHS AND ONE DAY AFTER THE CLOSING DATE.
THE WARRANT HOLDER, BY ACCEPTANCE OF THIS WARRANT CERTIFICATE, AGREES TIIAT THE WARRANTS REPRESENTED HEREBY AND ANY SHARES ACQUIRED PURSUANT TO THIS WARRANT CERTIFICATE ARE NOT TO BE SOLD BY THE HOLDER THEREOF, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE SECURITIES LEGISLATION OF THE JURISDICTION IN WHICH SUCH TRANSFER OR SALE TAKES PLACE. All securities issued upon the exercise this warrant shall bear the legends set forth in this Warrant Certificate. The holding of this Warrant Certificate will not entitle the Warrant Holder to any right or interest as a shareholder of BONTAN.
IN WITNESS WHEREOF, BONTAN has caused this Warrant Certificate to be issued as of the ___________, 2006 .
BONTAN CORPORATION INC.
Per: ____________________________
Kam Shah, CEO
1
SUBSCRIPTION FORM
TO:
BONTAN CORPORATION INC.
47 Avenue Road, Suite 200
Toronto, Ontario
M5R 2G3
Dear Sirs:
The undersigned hereby exercises the right to purchase and hereby subscribes for _____________ common shares in the capital stock of BONTAN CORPORATION INC. (BONTAN) referred to in the warrant certificate surrendered herewith according to the conditions thereof and herewith makes payment by cash or certified cheque of $_____________US Funds being the purchase price in full for the said shares.
The undersigned hereby reconfirms to BONTAN as true and correct all of the undersigned's representations and warranties set forth in the undersigned's Private Placement Subscription Agreement dated _______, 2006, with respect to the common shares of BONTAN for which the undersigned is subscribing.
Please issue a certificate for the shares being purchased as follows in the name of the undersigned:
NAME:
WARRANT HOLDER
(PLEASE PRINT)
ADDRESS:
___________________________
Please deliver a warrant certificate in respect of the common shares referred to in the warrant certificate surrendered herewith but not presently subscribed for, to the undersigned.
DATED this
day of
, ______
Per:_________________________
2
MESSERLI & KRAMER P.A.
1800 Fifth Street Towers
150 South Fifth Street
Minneapolis, Minnesota 55402-4246
Telephone (612) 672-3600
Facsimile (612) 672-3777
November 15, 2006
Bontan Corporation Inc.
47 Avenue Road, Suite 200
Toronto, Ontario, Canada M5R 2G3
Re: Issuance of Securities for Registration Statement on Form F-3
Ladies and Gentlemen:
You have requested our opinion as your special U.S. securities counsel with respect to certain matters in connection with the filing by Bontan Corporation Inc. (the "Company") of the Registration Statement on Form F-3 (the "Registration Statement") with the Securities and Exchange Commission covering the sale by the selling shareholders named therein of (i)10,400,000 of the Company's common shares (the "Shares") which were issued to such shareholders in a private placement, and (ii) 11,440,000 of the Company's common shares (the "Warrant Shares") that are issuable upon exercise of warrants (the "Warrants") which were also issued in the private placement.
In connection with this opinion, we have examined the Registration Statement and such other documents, records, certificates, memoranda and other instruments as we deem necessary as a basis for this opinion. We have assumed the genuineness and authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies thereof and execution and delivery of all documents, where execution and delivery are a prerequisite to the effectiveness thereof.
We advise you that we are licensed to practice in Minnesota. Accordingly, our opinion assumes that the provincial laws of Ontario and the federal laws of Canada would yield the same opinion as application of the laws of the State of Minnesota and the federal laws of the United States.
On the basis of the foregoing, and in reliance thereon, we are of the opinion that (1) the Shares are duly authorized, validly issued, fully paid and non-assessable; and (2) upon exercise of the Warrants and payment therefor in accordance with the terms of the Warrants, the Warrant Shares will be duly authorized, validly issued, fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/MESSERLI & KRAMER P.A./
Messerli & Kramer P.A.
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INDEPENDENT AUDITORS’ CONSENT
The Board of Directors Bontan Corporation Inc.
We consent to the use of our report dated July 27, 2005 with respect to the consolidated balance sheets of Bontan Corporation Inc. as of March 31, 2005 and 2004 and the related consolidated statements of operations, shareholders' equity and cash flows for the years then incorporated herein by reference, and to the reference to our firm under the heading “Experts” in the prospectus. Our report dated July 27, 2005, included additional comments for U.S. readers that stated that conditions and events existed that cast substantial doubt on the Company’s ability to continue as a going concern. The consolidated financial statements for those years did not include any adjustments that might result from the outcome of that uncertainty.
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Chartered Accountants Dated November 14, 2006 Thornhill, Ontario, Canada
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
TORONTO, MONTREAL, OTTAWA
INDEPENDENT AUDITORS’ CONSENT
We consent to the use of our report dated July 12, 2006 with respect to the consolidated balance sheet of Bontan Corporation Inc. as of March 31, 2006 and the related consolidated statement of operations, shareholders' equity and cash flows for the year then incorporated herein by reference, and to the reference to our firm under the heading “Experts” in the prospectus.
/s/
Toronto, Ontario, Canada
Chartered Accountants
November 17, 2006
1167 Caledonia Road
Toronto, Ontario M6A 2X1
Tel: 416 785 5353
Fax: 416 785 5663
WRITTEN ACTION OF
THE BOARD OF DIRECTORS OF
BONTAN CORPORATION INC.
IN LIEU OF MEETING
The undersigned, being all of the members of the Board of Directors of Bontan Corporation Inc., an Ontario corporation (the “Company”), do hereby take the following actions effective as of 18th day of September, 2006:
Ratification Of Private Placement Of Company Securities
WHEREAS, the Board of Directors by resolution s dated February 24, 2006 and March 6, 2006 had previously approved a private placement for the sale of up to 10,000,000 units (a "Unit"), at $.25US per Unit, each Unit comprised of one (1) common share of the Company (a "Common Share"), and one share purchase warrant entitling a subscriber to purchase for a period of two years from the Unit issuance date one (1) additional common share of the Company (a “Warrant Share”) at $.35US per Warrant Share to accredited investors as such term is defined in Rule 501(a) of the Regulation D of the Securities Act of 1933 (the "Securities Act") and/or to non-U.S. persons qualifying in an offering under Regulation S of the Securities Act and also complying with applicable securities laws in the provinces of Canada ("Canadian Securities Laws") (the foregoing referred to as the "Private Placement");
WHEREAS, the Company has closed on such Private Placement and desires to ratify certain additional actions of the Company as set forth herein; NOW THEREFORE BE IT:
RESOLVED, that the offer and sale of the Private Placement by the Company of a total of 10,400,000 Units is hereby ratified and approved in all respects; and
RESOLVED, that the issuance of 1,040,000 Warrant Shares to Current Capital Corp. as a finders fee for its services and efforts in connection with the Private Placement is hereby ratified and approved in all respects.
F-3 Registration Statement
WHEREAS, the Company desires to register for resale (a) 10,400,000 Common Shares issued in connection with the Private Placement, and (b) 11,440,000 Warrant Shares which may be issued upon the exercise of warrants issued in the Private Placement to allow the holders thereof who received the Common Shares and the Warrant Shares to be able to dispose of the same from time to time pursuant to a Registration Statement on Form F-3; NOW, THEREFORE BE IT
RESOLVED, that a Registration Statement on Form F-3 under the Securities Act of 1933, as amended, covering the Common Shares and the Warrant Shares is hereby approved to be prepared in all respects.
RESOLVED FURTHER, that the Company, acting through its Chief Executive Officer, is hereby authorized to file such the Registration Statement on Form F-3, with the U.S. Securities and Exchange Commission, that the Chief Executive Officer is hereby authorized to make changes to such document as may be contemplated or required pursuant to the rules and regulations of the Securities and Exchange Commission all in such form as such officer may determine and approve (such determination and approval to be established conclusively by such officer’s execution and delivery of such documents and any such related documents and instruments).
Further Actions
RESOLVED, that the Board of Directors hereby authorizes and directs the proper officers of the Company to take any and all action necessary or convenient for carrying out the foregoing resolutions consistent with the Securities Act and the Canadian Securities Laws.
IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.
DIRECTORS:
__/s/____________________________
Kam Shah
__/s/____________________________
Dean Bradley
__/s/____________________________
Damian Lee
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