UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________________________________

SCHEDULE 14A

______________________________________

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.      )

Filed by the Registrant

 

   

Filed by a Party other than the Registrant

 

   

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material under §240.14a-12

INMED PHARMACEUTICALS INC.

_________________________________________________________________________________________________

(Name of Registrant as Specified In Its Charter)

_________________________________________________________________________________________________

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

   

1)

 

Title of each class of securities to which transaction applies:

       

 

   

2)

 

Aggregate number of securities to which transaction applies:

       

 

   

3)

 

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

       

 

   

4)

 

Proposed maximum aggregate value of transaction:

       

 

   

5)

 

Total fee paid:

       

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

   

1)

 

Amount Previously Paid:

       

 

   

2)

 

Form, Schedule or Registration Statement No.:

       

 

   

3)

 

Filing Party:

       

 

   

4)

 

Date Filed:

       

 

 

INMED PHARMACEUTICALS INC.

NOTICE OF ANNUAL GENERAL MEETING

AND

MANAGEMENT INFORMATION CIRCULAR

OCTOBER 28, 2021

 

INMED PHARMACEUTICALS INC.
Suite 310 – 815 West Hastings St.
Vancouver, British Columbia V6C 1B4

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

TAKE NOTICE that the annual general meeting (the “Meeting”) of the shareholders (the “Shareholders”) of INMED PHARMACEUTICALS INC. (“InMed” or the “Company”) will be held virtually on Friday, December 17, 2021 at 2:00 p.m., Pacific Standard Time, for the following purposes:

1.      to receive the audited consolidated financial statements of the Company, together with the auditor’s report thereon, for the year ended June 30, 2021;

2.      to elect five (5) directors of the Company named in the accompanying Proxy Statement and Management Information Circular to hold office until the next annual meeting of the Company or until their successors are duly elected;

3.      to appoint KPMG LLP as the auditor/independent registered public accounting firm of the Company for the ensuing year and to authorize the directors to fix the remuneration to be paid to the auditors; and,

4.      to transact such other business as may properly come before the Meeting or any adjournment(s) or postponement(s) thereof.

This year, as part of its corporate social responsibility in response to COVID-19, and in order to mitigate potential risks to the health and safety of its shareholders, employees, communities and other stakeholders, the Meeting will be held in virtual only format, which will be conducted via telephone conference. You will not be able to attend the Meeting in person.

Registered Shareholders and validly appointed proxyholders may attend the meeting by calling either +1 (914) 987-7959, or +1 (855) 605-1745 (toll-free in Canada and the United States). Participants will be prompted for the conference ID number 6164365. The live audio webcast of the Meeting will begin promptly at 2:00 p.m. Pacific Standard Time. Online access to the audio webcast will open 15 minutes prior to the start of the Meeting. We encourage you to access the meeting in advance of the designated start time. Beginning 15 minutes prior to and during the Meeting, we will have support available to assist shareholders with any technical difficulties they may have accessing or hearing the virtual meeting. Registered Shareholders who attend the virtual meeting will have an equal opportunity to participate at the Meeting, regardless of their geographic location.

As permitted by Canadian securities regulators, the Company has elected to use notice-and-access provisions under National Instrument 54-101 and National Instrument 51-102 (“Notice and Access Provisions”) for this Meeting. Notice and Access Provisions are a set of rules developed by the Canadian Securities Administrators that reduce the volume of materials that must be physically mailed to shareholders of the Company (“Shareholders”) by allowing the Company to post the Information Circular and any additional materials online. Under Notice and Access Provisions, instead of receiving printed copies of the Meeting materials, Shareholders will receive a Notice-and-Access notification containing details of the Meeting date, login particulars and purpose, as well as information on how they can access the Meeting materials electronically. Shareholders will also receive a form of Proxy (for registered shareholders) or a Voting Instruction Form (for beneficial shareholders), allowing each shareholder to submit their vote by proxy.

Accompanying this Notice of Meeting is an Information Circular, a form of Proxy, and a financial statements request card whereby shareholders can request to be added to the Company’s supplemental mailing list. The Information Circular provides more detailed information relating to the matters to be addressed at the Meeting and forms part of this Notice. The Information Circular is available at www.inmedpharma.com, at www.sec.gov and under the Company’s profile on SEDAR at www.sedar.com. Any shareholder who wishes to receive a paper copy of the Information Circular should contact the Company by telephone: +1 (604) 669 7207.

The board has fixed the close of business on October 28, 2021 (the “Record Date”) for the determination of shareholders who are entitled to receive notice of, and to vote at, the Meeting or any adjournment or postponement thereof. Shareholders who are unable to or who do not wish to attend the Meeting by telephone conference as provided above are requested to read, date and sign the accompanying proxy and deliver it to Computershare Investor Services Inc. (“Computershare”). If a shareholder does not deliver a proxy to Computershare by 2:00 p.m. (Pacific Standard Time)

 

on December 15, 2021 (or at least 48 hours, excluding Saturdays, Sundays and holidays, before any adjournment or postponement of the meeting at which the proxy is to be used) then the shareholder will not be entitled to vote at the Meeting by proxy. The time limit for deposit of proxies may be waived or extended by the Meeting Chair at his or her discretion without notice.

To Vote Your Shares in Advance of the Meeting:

Shareholders are urged to vote by proxy in advance of the Meeting to help ensure that the vote will be represented at the Meeting. Shareholders can vote using a Proxy (for registered shareholders) or a Voting Instruction Form (for beneficial shareholders) by one of the following alternative methods, not later than 2:00 p.m. (PST), on December 15, 2021, being the proxy cut-off date for the Meeting, whether or not the shareholders plan to attend the Meeting:

BY INTERNET:

 

www.investorvote.com

BY TELEPHONE:

 

1-866-732-VOTE (8683) Toll Free Registered Shareholders
1-866-734-VOTE (8683) Toll Free NOBO Holders

BY MAIL:

 

Computershare Investor Services Inc., Proxy Dept.
100 University Avenue, 8th Floor, Toronto, Ontario, M5J 2Y1 CANADA

DATED at Vancouver, British Columbia, October 28, 2021.

BY ORDER OF THE BOARD

(signed) Eric A. Adams
President & CEO

 

INMED PHARMACEUTICALS INC.
Suite 310 – 815 West Hastings St.
Vancouver, British Columbia V6C 1B4

PROXY STATEMENT AND
MANAGEMENT INFORMATION CIRCULAR

unless otherwise noted, as at October 28, 2021

THE MEETING

This proxy statement and management information circular (the “Information Circular”) is furnished in connection with the solicitation of proxies by the management of InMed Pharmaceuticals Inc. for use at the annual general meeting (the “Meeting”) of its shareholders to be held on December 17, 2021 at the time and place and for the purposes set forth in the accompanying notice of the Meeting.

In this Information Circular, references to “the Company,” “InMed,” “we,” and “our” refer to InMed Pharmaceuticals Inc. “Common Shares” or “Shares” means common shares without par value in the capital of the Company; “Shareholders” means holders of Common Shares; “Beneficial Shareholders” means Shareholders who do not hold Common Shares registered in their own name; “Registered Shareholders” means Shareholders which are registered holders of Common Shares; and “Intermediaries” refers to brokers, investment firms, clearing houses and similar entities that own securities on behalf of Beneficial Shareholders.

No person is authorized to give any information or to make any representation other than those contained in this Information Circular and, if given or made, such information or representation should not be relied upon as having been authorized by the Company. The information contained herein is given as of October 28, 2021, except as otherwise indicated. The delivery of this Information Circular shall not, under any circumstances, create an implication that there has not been any change in the information set forth herein since the date of this Information Circular.

All dollar amounts in this Information Circular are in United States dollars unless specifically otherwise indicated. Unless the context otherwise requires, all references to the “Meeting” in this Information Circular include all adjournments and postponements thereof.

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voting INFORMATION

InMed’s management is using this Information Circular to solicit proxies from Shareholders for use at the Meeting.

Solicitation of Proxies

The solicitation of proxies will be primarily by mail, but InMed’s directors, officers and regular employees may also solicit proxies personally or by telephone. InMed will bear all costs of the solicitation, including the printing, handling and mailing of the Meeting materials. InMed has arranged for Intermediaries to forward the Meeting materials to beneficial owners of InMed held of record by those Intermediaries and InMed may reimburse the Intermediaries for their reasonable fees and disbursements in that regard.

Appointment of Proxyholders

The individuals named in the accompanying form of proxy (the “Proxy”) are directors or officers of InMed. If you are a Shareholder entitled to vote at the Meeting, you have the right to appoint an individual or company other than either of the individuals designated in the Proxy, who need not be a Shareholder, to attend and act for you and on your behalf at the Meeting. You may do so either by striking out the name of the persons named in the Proxy and inserting the name desired of that other individual or company in the blank space provided in the Proxy or by completing and delivering another suitable form of proxy.

The only methods by which you may appoint a person as proxy are submitting a proxy by mail, internet, or fax.

Voting by Proxyholder

If a Shareholder specifies a choice for a matter in the Proxy, and if the Proxy is duly completed and delivered and has not been revoked, the individuals named in the Proxy will vote, or withhold voting, the Common Shares represented thereby in accordance with the choice you specify on any ballot that may be called for. The Proxy confers discretionary authority on the individuals named therein with respect to:

•        each matter or group of matters identified therein for which a choice is not specified;

•        any amendment to or variation of any matter identified therein; and

•        any other matter that properly comes before the Meeting.

In respect of a matter for which a choice is not specified in the Proxy, the individuals named in the Proxy will vote Common Shares represented by the Proxy for the approval of such matter.

Registered Shareholders

If you are a Registered Shareholder, you may wish to vote by proxy whether or not you attend the Meeting. If you wish to submit a Proxy, you must complete, date and sign the Proxy, and then return it to InMed’s transfer agent, Computershare Investor Services Inc. before 2:00 p.m. (PST) on Wednesday, December 15, 2021, or, if the Meeting is adjourned or postponed, the day that is two business days before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law. The Chairman of the Meeting may waive the proxy cut-off without notice.

Beneficial Shareholders

The following information is of significant importance to Shareholders who do not hold Common Shares in their own name. Beneficial Shareholders should note that the only proxies that can be recognized and acted upon at the Meeting are those deposited by Registered Shareholders.

If Common Shares are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those Common Shares will not be registered in the Shareholder’s name on the records of InMed. Such Common Shares will more likely be registered under the names of the Shareholder’s broker or an agent of that broker.

Intermediaries are required to seek voting instructions from Beneficial Shareholders in advance of Shareholders’ meetings. Every Intermediary has its own mailing procedures and provides its own return instructions to clients.

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Materials are being sent to both Registered Shareholders and Beneficial Shareholders. There are two kinds of Beneficial Shareholders — those who object to their names being made known to the issuers of securities which they own (called OBOs for Objecting Beneficial Owners), and those who do not object (called NOBOs for Non-Objecting Beneficial Owners). If you are a Beneficial Shareholder and InMed or its agent has sent these materials directly to you, your name and address and information about your holdings of Common Shares have been obtained in accordance with applicable securities regulatory requirements from the broker or other Intermediary who holds Common Shares on your behalf.

InMed is taking advantage of National Instrument 54-101Communications with Beneficial Owners of Securities of a Reporting Issuer, which permits it to deliver proxy-related materials indirectly to its NOBOs and OBOs. If you are a Beneficial Shareholder and InMed or its agent has sent these materials directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the broker or other Intermediary your Common Shares on your behalf. As a result, NOBOs and OBOs can expect to receive Meeting materials from their Intermediaries via Broadridge Financial Solutions Inc. (“Broadridge”), including a voting information form (“VIF”). Beneficial Shareholders should follow the instructions in the VIF to ensure that their Common Shares are voted at the Meeting. The VIF or form of proxy will name the same individuals as InMed’s Proxy to represent you at the Meeting. You have the right to appoint a person (who need not be a Shareholder of InMed) other than the individuals designated in the VIF, to represent you at the Meeting. To exercise this right, you should insert the name of your desired representative in the blank space provided in the VIF. The completed VIF must then be returned in accordance with the instructions in the VIF. Broadridge then tabulates the results of all instructions received and completed in accordance with the instructions provided in the VIF and provides appropriate instructions respecting the voting of Common Shares to be represented at the Meeting. If you receive a VIF from Broadridge, you cannot use it to vote Common Shares directly at the Meeting — the VIF must be completed and returned in accordance with its instructions, well in advance of the Meeting in order to have your Common Shares voted.

Although as a Beneficial Shareholder you may not be recognized directly at the Meeting for the purposes of voting Common Shares registered in the name of your broker, you, or a person designated by you, may attend at the Meeting as proxyholder for your broker and vote your Common Shares in that capacity. If you wish to attend the Meeting and indirectly vote your Common Shares as proxyholder for your broker, or to have a person designated by you do so, you should enter your own name, or the name of the person you wish to designate, in the blank space on the VIF provided to you and return the same in accordance with the instructions provided in the VIF, well in advance of the Meeting.

Alternatively, you can request in writing that your broker send you a legal proxy which would enable you to attend the Meeting and vote your Common Shares.

In accordance with the requirements of NI 54-101 and SEC Rule 14a-16, the Company is using notice-and-access to send proxy-related materials for use in connection with the Meeting to Beneficial Shareholders using the “indirect” sending procedures set out in NI 54-101 and SEC Rule 14a-16. Accordingly, the Company has distributed copies of the Notice of Internet Availability or, if a Beneficial Shareholder has so requested, proxy materials, in connection with the Meeting to Broadridge to deliver, on behalf of the Intermediaries, to each non-registered Shareholder.

Revocation of Proxies

In addition to revocation in any other manner permitted by law, a Registered Shareholder who has given a Proxy may revoke it (a) by executing a proxy bearing a later date, (b) by executing a valid notice of revocation (where a new proxy is not also filed), or (c) personally attending the Meeting and voting the Registered Shareholder’s Common Shares.

A later dated proxy or notice of revocation must be executed by the Registered Shareholder or the Registered Shareholder’s authorized attorney in writing, or, if the Registered Shareholder is a corporation, under its corporate seal by an officer or attorney duly authorized, and delivered to the Proxy Department, Computershare Investor Services Inc., 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, or to the address of the registered office of InMed at Suite 310 – 815 West Hastings St., Vancouver, British Columbia, V6C 1B4.

A later dated proxy must be received before 2:00 p.m. (PST) on Wednesday, December 15, 2021, or, if the Meeting is adjourned or postponed, the day that is two business days before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law.

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A notice of revocation must be received before 2:00 p.m. (PST) on Wednesday, December 15, 2021, or, if the Meeting is adjourned or postponed, the last business day before any reconvening thereof at which the Proxy is to be used, or to the chair of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law.

Only Registered Shareholders have the right to revoke a proxy. Beneficial Shareholders who wish to change their vote must, in sufficient time in advance of the Meeting, arrange for their Intermediaries to change the vote and, if necessary, revoke their proxy.

A revocation of a proxy will not affect a matter on which a vote is taken before the revocation.

Voting Securities and Principal Holders of Voting Securities

Record Date, Quorum and Outstanding Shares

The record date for determining persons entitled to receive notice of and vote at the Meeting is October 28, 2021. Only Shareholders of record as of the close of business on October 28, 2021 are entitled to receive notice of and vote or grant proxies to vote at the Meeting, or any adjournment(s) or postponement(s) thereof, in the manner and subject to the procedures described in this Information Circular and Proxy. Two persons who hold not less than 33⅓% of the issued and outstanding shares of the Company entitled to vote at the Meeting must be present, in person or by proxy, for the transaction of business of the Meeting. This is the quorum for the Meeting. Abstentions and broker non-votes are included in the calculation of the number of votes considered to be present at the Meeting for purposes of determining a quorum.

Registered Shareholders or proxyholders representing shareholders participating in the Meeting virtually will be considered to be present in person at the Meeting for the purposes of determining quorum. In the absence of a quorum, the Meeting will be adjourned in accordance with the Company’s articles.

At the close of business on October 28, 2021, 14,137,034 Common Shares of InMed were issued and outstanding.

Each Shareholder is entitled to one vote per Common Share held on all matters to come before the Meeting. Common Shares of InMed are the only securities of InMed which will have voting rights at the Meeting.

Vote Required

Proposal 1 does not require an approval and therefore there is no voting standard for this proposal. With respect to Proposal 2, assuming the existence of a quorum, the director nominees receiving a plurality of the votes of the holders of Common Shares present in person or by proxy at the meeting and entitled to vote on the election of directors will be elected directors. With respect to Proposal 3, the affirmative vote of a simple majority of the Common Shares present, either in person or represented by proxy, and entitled to vote at the Meeting is required to decide such matter. All votes will be tabulated by the inspector of election appointed for the Meeting, who will separately tabulate affirmative and negative votes, abstentions, withheld votes and broker non-votes. Abstentions represent a shareholder’s affirmative choice to decline to vote on a proposal and withheld votes represent a shareholder’s affirmative choice to decline to vote for a particular director nominee or the ratification of the appointment of KPMG LLP as the auditor. Properly executed proxy cards that are marked “abstain” or “withhold” on any proposal, as applicable, will be treated as abstentions for that proposal.

Broker non-votes occur when a broker or nominee holding shares for a beneficial owner does not vote on a non-routine proposal because the broker or nominee has not received voting instructions from the beneficial owner and does not have discretionary voting power with respect to such proposal. A broker or other nominee holding shares for a beneficial owner may generally vote on routine matters, but not non-routine matters, without receiving voting instructions. The uncontested election of directors (Proposal 2) is considered a non-routine matter. The ratification of the appointment of the independent registered public accounting firm (Proposal 3) is considered a routine matter. If your shares are held by a broker or nominee and you do not provide such voting instructions, your shares will not be voted FOR Proposal 3. Please provide instructions to your brokers or nominee on how to vote your shares. Any Shares represented at the Meeting but not voted (whether by abstention, broker non-vote or otherwise) will have no impact on any matters to be acted upon at the Meeting.

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COMPANY STRUCTURE

InMed was incorporated under the British Columbia Business Corporations Act. InMed has undergone a number of corporate name changes since its incorporation, most recently changing its name to InMed Pharmaceuticals Inc. on October 6, 2014.

The Common Shares of the Company are listed on the Nasdaq Capital Market (“Nasdaq”) under the trading symbol “INM”.

The financial year end of the Company is June 30. The reporting currency of the Company is the United States dollar.

InMed’s head office is located at Suite 310 – 815 West Hastings St., Vancouver, British Columbia V6C 1B4 and its registered office is located at 2500 – 700 West Georgia Street, Vancouver, British Columbia V7Y 1B3.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

No director or executive officer of the Company, nor any person who has held such a position since the beginning of the last completed financial year of the Company, nor any associate or affiliate of any of the foregoing persons, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than the election of directors except as otherwise set out herein.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except for compensation arrangements for our directors and executive officers, which are described elsewhere in this circular, there have been no related party transactions in our two most recently completed financial years that required disclosure under any applicable Canadian or U.S. securities laws.

Indemnification Agreements

Our Articles contain provisions limiting the liability of directors and provide that we will indemnify each of our directors and officers to the fullest extent permitted under law. In addition, we have entered into an indemnification agreement with each of our directors and our Chief Financial Officer, which requires us to indemnify them.

Policies and Procedures for Transactions with Related Persons

We have adopted a written policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common shares and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related person transaction with us without the approval or ratification of our Board or our audit committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director, beneficial owner of more than 5% of any class of our common shares, or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and such person would have a direct or indirect interest, must be presented to our Board or our audit committee for review, consideration and approval. In approving or rejecting any such proposal, our Board or our audit committee is to consider the material facts of the transaction, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

Indebtedness of Directors and Officers

No current or former director, officer or employee of the Company, or any associate of any such individual, is, or was at any time during the most recently completed financial year, indebted to the Company, nor is any indebtedness of any such person to another entity the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company.

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PRINCIPAL HOLDERS OF COMMON SHARES OF INMED

The table below sets forth information known to us regarding the beneficial ownership of our common shares as of October 28, 2021 for:

•        each person we believe beneficially holds more than 5% of our outstanding common shares;

•        each of our directors and NEOs; and

•        all of our directors and executive officers as a group.

The number of common shares beneficially owned by a person includes shares subject to options held by that person that are currently exercisable or that become exercisable within 60 days of October 28, 2021. Percentage calculations assume, for each person and group, that all common shares that may be acquired by such person or group pursuant to options currently exercisable or that become exercisable within 60 days of October 28, 2021 are outstanding for the purpose of computing the percentage of common shares owned by such person or group. However, such unissued common shares described above are not deemed to be outstanding for calculating the percentage of common shares owned by any other person.

Except as otherwise indicated, the persons in the table below have sole voting and investment power with respect to all common shares shown as beneficially owned by them, subject to community property laws where applicable. We do not know of any arrangement, the operation of which may at a subsequent date result in a change in control of us.

Name and Address of Beneficial Owner

 

Number of
Common
Shares
Beneficially
Owned

 

Percentage of
Common
Shares
Beneficially
Owned (%)*

Five Percent Shareholders:

       

 

N/A

       

 

         

 

NEOs and Directors:

       

 

Eric A. Adams, MIBS(1)

 

336,142

 

2.3

%

Adam Cutler(2)

 

39,425

 

**

 

William J. Garner, MD(3)

 

37,152

 

**

 

Andrew Hull(4)

 

58,364

 

**

 

Catherine Sazdanoff, JD(5)

 

14,183

 

**

 

Bruce Colwill(6)

 

61,136

 

**

 

Alexandra Mancini(7)

 

69,014

 

**

 

All other executive officers as a group(8)

 

112,332

 

**

 

All executive officers and directors as a group (9 persons)

 

727,748

 

4.9

%

____________

*        Based on 14,137,034 common shares outstanding on October 28, 2021

**      Less than 1%

(1)      Eric A. Adams’ beneficial ownership consists of 36,283 common shares owned directly, 284,924 common shares issuable pursuant to presently exercisable options, and 14,935 common shares owned by his spouse. Mr. Adams disclaims beneficial ownership in the 14,935 common shares held by his spouse;

(2)      Adam Cutler’s beneficial ownership consists of 39,425 common shares issuable pursuant to presently exercisable options;

(3)      William J. Garner’s beneficial ownership consists of 33,364 common shares issuable pursuant to presently exercisable options and 3,788 common shares owned by his spouse. Mr. Garner disclaims beneficial ownership in the 3,788 common shares held by his spouse;

(4)      Andrew Hull’s beneficial ownership consists of 18,939 common shares owned directly and 39,425 common shares issuable pursuant to presently exercisable options;

(5)      Catherine Sazdanoff’s beneficial ownership consists of 14,183 common shares issuable pursuant to presently exercisable options;

(6)      Bruce Colwill’s beneficial ownership consists of 6,515 common shares owned directly and 54,621 common shares issuable pursuant to presently exercisable options;

(7)      Alexandra Mancini’s beneficial ownership consists of 6,061 common shares owned directly and 62,953 common shares issuable pursuant to presently exercisable options;

(8)      The beneficial ownership of all other executive officers as a group consists of 1,803 common shares owned directly and 110,529 common shares issuable pursuant to presently exercisable options.

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PARTICULARS OF MATTERS TO BE ACTED UPON

PROPOSAL 1: PRESENTATION OF FINANCIAL STATEMENTS

The Company’s audited consolidated financial statements for the fiscal year ended June 30, 2021, including the related management’s discussion and analysis and auditors report will be presented to Shareholders at the Meeting. No vote will be taken with respect to the audited annual financial statements and receipt of the audited annual financial statements will not constitute approval or disapproval of any matters referred to therein. These documents are available under the Company’s profile on SEDAR at www.sedar.com, at www.sec.gov, the Company’s website at www.inmedpharma.com, and copies may be obtained from the Company upon request.

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PROPOSAL 2: ELECTION OF DIRECTORS

The Board presently consists of five (5) directors. The Board is nominating five (5) individuals to stand for election as directors at the Meeting.

The term of office of each of the present directors expires at the Meeting. The Board of Directors of the Company proposes to nominate the persons named below for election as directors of the Company at the Meeting. In accordance with the Articles of the Company, each director elected will hold office until the next annual general meeting of the shareholders of the Company or until their successor is duly elected or appointed, unless such office is earlier vacated in accordance with the Articles or such director becomes disqualified to act as a director pursuant to the British Columbia Business Corporations Act.

Except where authority to vote on the Election of Directors is withheld, unless otherwise indicated, the named proxyholders will vote “FOR” the election of each of the proposed nominees set forth above as directors of the Company.

The following table and notes thereto sets forth the name of each person proposed to be nominated by the Board of Directors for election as a director, the municipality in which they are ordinarily resident, all offices of the Company now held by them, the period of time for which they have been a director of the Company, and the number of common shares beneficially owned by them, directly or indirectly, or over which they exercise control or direction, as at the date hereof:

Name and Address of
Nominee and Present
Position with Compan
y

 

Principal Occupation During the Last Five Years

 

Director Since

 

Number of
Approximate
Voting
Securities
(1)

Catherine Sazdanoff(3)(4)(5)(6)

Illinois, USA Director

 

President & CEO, Sazdanoff Consulting LLC (January 2015 – present); Chief Business Development Officer (February 2021-present) & Chief Compliance and Legal Officer (February 2019-present), Strata Oncology; Chief Business Officer, Strata Oncology (May 2016 – September 2017); Vice President, Head of Corporate Projects, Takeda Pharmaceuticals (October 2012 – January 2015).

 

July 1, 2019

 

22,091 options

Adam Cutler(3)(4)(6)

New York, USA Director

 

CFO of Q32 Bio (July 2021 – present); CFO of Molecular Templates, Inc. (November 2017 – July 2021); SVP, Corporate Affairs-Arbutus Biopharma (March 2015 – November 2017);

 

November 23, 2015

 

39,425 options

William J. Garner(3)(5)(6)

Puerto Rico Director

 

Founder & Director of Tryp Therapeutics (August 2019 – present); Founder and Director of GeneTether Inc. (February 2018 – present); Managing Director of EGB Ventures (2002 – present); Director of Race Oncology (July 2016 – 2020); Director of Isla Pharmaceuticals (March 2017 – 2020).

 

June 13, 2016

 

3,788 Common Shares(7)

33,364 options

Andrew Hull(3)(4)(5)(6)

Illinois, USA Director

 

Vice President of Global Alliances, Takeda Pharmaceuticals (April 2014 – April 2018); Chairman, Illinois Biotechnology Industry Organization (2 terms); former member of Kenyon College Board of Trustees; Director of Zucara Therapeutics (March 2019 – March 2020).

 

September 12, 2016

 

18,939 Common Shares

39,425 options

Eric. A. Adams(2)

British Columbia, Canada President & CEO Director

 

President and CEO of InMed (June 16, 2016 – present).

 

June 16, 2016

 

36,283(8) Common Shares

472,424 options

____________

(1)      Voting securities beneficially owned, directly or indirectly, or over which control or direction is exercised.

(2)      Not an independent director because he is an executive officer of InMed.

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(3)      Independent director.

(4)      Denotes member of the Audit Committee. Mr. Cutler is currently the Chair of the Audit Committee. All
members of the Audit Committee are independent.

(5)      Denotes member of the Compensation Committee. Mr. Hull is currently the Chair of the Compensation Committee. All members of the Compensation Committee are independent.

(6)      Denotes member of the Nominating & Governance Committee. Ms. Sazdanoff is currently the Chair of the Nominating & Governance Committee. All members of the Nominating & Governance Committee are independent.

(7)      The 3,788 common shares are owned by his spouse. Mr. Garner disclaims beneficial ownership in the 3,788 common shares held by his spouse.

(8)      Includes 14,935 common shares owned by his spouse. Mr. Adams disclaims beneficial ownership in the 14,935 common shares held by his spouse.

Profile of the Board

Catherine A. Sazdanoff (Age: 65)

Ms. Sazdanoff, who joined our Board effective July 1, 2019, is a 35-year veteran of the global pharmaceutical industry and currently serves as President and CEO of Sazdanoff Consulting LLC, founded in 2014, where she works with healthcare companies on strategy and corporate/business development. She also serves as Chief Business Development Officer and Chief Compliance and Legal Officer for Strata Oncology, Inc., having worked with Strata in other roles since 2016. Prior to Sazdanoff Consulting, Ms. Sazdanoff held various global VP roles in corporate/business development and finance at Takeda Pharmaceuticals, where she joined in 2006. Prior to Takeda, Ms. Sazdanoff served in senior management positions at Abbott Laboratories from 1984 until 2015, including litigation, commercial and transactional legal roles, marketing, compliance, and business development. At both Takeda and Abbott, she completed numerous transformational deals. Ms. Sazdanoff is a Director of Meridian Bioscience and of Vascugen, Inc. She earned a BA degree from the University of Notre Dame and a JD degree from Northwestern University School of Law. Ms. Sazdanoff makes valuable contributions to the Board based on her over 30 years of experience in various legal, compliance, commercial and business development roles with leading pharmaceutical companies. Ms. Sazdanoff has been a director of the Company since July 2019.

Adam Cutler (Age: 47)

Mr. Cutler is currently Chief Financial Officer at Q32 Bio, a biotechnology company. Prior to joining Q32 Bio in 2021, Mr. Cutler was Chief Financial Officer at Molecular Templates, which he joined in 2017. Previously, he was Senior Vice President of Corporate Affairs at Arbutus Biopharma from 2015 until 2017 and, prior to that, was Managing Director at The Trout Group LLC from 2012 until 2015, where he executed financings and advised a wide range of life science companies on investor relations, business development, and capital raising strategies. Mr. Cutler spent almost 12 years as a sell-side analyst with firms including Credit Suisse, Canaccord Genuity, JMP Securities, and Bank of America Securities. He also worked in healthcare consulting as an Analyst at The Frankel Group and a Consultant for Ernst & Young LLP. Mr. Cutler holds a Bachelor of Arts degree in Economics from Brandeis University. Mr. Cutler previously served as a Director of Navidea Biopharmaceuticals, Inc. Mr. Cutler makes valuable contributions to the Board based on his over 20 years of experience in the global healthcare industry, where he successfully held senior leadership positions in various roles from equity research, corporate affairs and strategy, investor relations and consulting. Mr. Cutler has been a director of the Company since November 2015.

William J. Garner, MD, Chairman of the Board (Age: 55)

Dr. Garner is a biotech industry entrepreneur with over 25 years’ experience. In 2002, he founded EGB Ventures, where he has focused on advancing technologies and companies to significant value inflection points, leading to monetization of assets via licensing, M&A or IPO transactions. Dr. Garner served as Non-Executive Chairman and Founder of Race Oncology from 2016 to 2020 and as Founder and Chairman at Isla Pharmaceuticals from 2017 to 2020. He is currently a Founder and Director of Tryp Therapeutics and of GeneTether Inc. In addition, he has held Chief Executive Officer positions with a public company in the US and a public company in Australia. Dr. Garner brings additional medical affairs experience from his tenure at Hoffmann LaRoche’s oncology division in 1999. Prior to Roche, Dr. Garner was a healthcare merchant banker in New York City. He has a Master of Public Health from Harvard and earned his M.D. at New York Medical College. Dr. Garner trained in Anatomic Pathology at Columbia-Presbyterian and is currently

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a licensed physician in the State of New York. Dr. Garner makes valuable contributions to the Board based on his extensive director-level and executive management experience, as well as his medical background. Mr. Garner has been a director of the Company since June 2016.

Andrew Hull (Age: 58)

Mr. Hull most recently served as Vice President of Global Alliances for Takeda Pharmaceuticals from 2014 to 2018, where he was responsible for maximizing the success of Takeda’s growing number (40+) of commercial and research and development partnerships with many of the industry’s leading pharmaceutical and biotech companies. In previous roles, he led marketing and commercial development of Takeda’s U.S. portfolio of over $3 billion. Additionally, he held positions of increasing responsibility at Immunex and Abbott Laboratories. Mr. Hull received a Bachelor’s Degree in Biology from Kenyon College in 1985. He also recently served as a member of the Board of the Illinois Biotechnology Industry Organization, where he served two terms as Chairman, and recently was a member of the Kenyon College Board of Trustees. Mr. Hull recently served as a Director of Zucara Therapeutics. Mr. Hull makes valuable contributions to the Board based on his over 30 years of experience in various commercial and business development roles with leading pharmaceutical and biotech companies. Mr. Hull has been a director of the Company since September 2016.

Eric A. Adams (also President, CEO) (Age: 58)

Mr. Adams is a seasoned biopharmaceutical executive with over 30 years’ experience in company and capital formation, global market development, mergers and acquisitions, licensing and corporate governance. Mr. Adams has been our President and Chief Executive Officer, and a Director of InMed since 2016. During the period from 2011 to 2016, Mr. Adams served as a mentor and senior consultant to several biopharmaceutical and innovative technology companies. He previously served as Chief Executive Officer and Director at EnGene Inc. between 2004 and 2011. Prior to EnGene, he held senior roles in global market development with QLT Inc., Advanced Tissues Science Inc., Abbott Laboratories, and Fresenius AG. He is a dual citizen of Canada and the United States and holds a Master of International Business degree from the University of South Carolina and a Bachelor’s degree in Chemistry from the University of Southern Indiana. Mr. Adams makes valuable contributions to the Board based on his extensive international business development experience in a wide range of disease categories and contributions to growing several organizations across the pharmaceutical and medical device arenas.

Majority Voting Policy

The Board has adopted a policy (the “Majority Voting Policy”) providing for majority voting in Director elections at any meeting where an “uncontested election” of Directors is held. An “uncontested election” means an election where the number of nominees for election as Directors is equal to the number of Directors to be elected.

Pursuant to the Majority Voting Policy, the forms of proxy circulated in connection with a meeting of Shareholders at which an election of Directors is conducted will provide Shareholders with the ability to vote in favour of, or to withhold from voting for, each Director nominee. If the number of proxy votes withheld for a particular Director nominee is greater than the votes in favour of that nominee, the Director nominee is required to submit his or her resignation to the Chair of the Board of Directors. Following receipt of a resignation, the Governance Committee will consider whether to accept the offer of resignation and recommend to the Board of Directors whether or not to accept it. Absent exceptional circumstances, the Board of Directors will accept the resignation of the Directors in question and will, in any case, publicly disclose a decision within 90 days following the applicable meeting of Shareholders. If a resignation is accepted, the Board of Directors may, in accordance with the Company’s Articles and the British Columbia Business Corporations Act, appoint a new director to fill the vacancy created by the resignation, reduce the size of the Board of Directors, leave the vacancy open, call a special meeting to fill the vacancy, or any combination of the foregoing. In the event that any Director who received a greater number of proxy votes withheld than votes in favour of such Director’s election does not tender his or her resignation in accordance with the Majority Voting Policy, they will not be re-nominated by the Board of Directors.

Policies and Terms of Reference

In addition to the Majority Voting Policy, the Board has adopted an Auditor Services Pre-Approval Policy, an Insider Trading Policy, Corporate Disclosure Policy, Related Person Transaction Approval Policy, Code of Conduct, Whistle Blower Policy and Terms of Reference for the Board, Chair of the Board, Audit Committee, and Compensation Committee, the text of each of which can be found on the Company’s website at https://www.inmedpharma.com/about/corporate_governance/.

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Corporate Cease Trade Orders, Bankruptcies, Penalties, Sanctions or Individual Bankruptcies

To the knowledge of the Company, no nominees for election as a director of the Company:

a)      is at the date of this Information Circular, or has been, within 10 years before the date of this Information Circular, a director, chief executive officer or chief financial officer of any company (including the Company) or has been, or acted in that capacity for a company that:

(i)     was subject, to a cease trade or similar order or an order that denied the relevant company access to any exemptions under securities legislation, that was in effect for a period of more than 30 consecutive days (collectively, an “Order”); when such Order was issued while the person was acting in the capacity of a director, chief executive office or chief financial officer of the relevant company; or

(ii)    was subject to an Order for that was issued after such person ceased to be a director, chief executive officer or chief financial officer of the relevant company, and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive office or chief financial officer of the relevant company; or

b)      is, as at the date of this Information Circular, or has been within 10 years before the date of the Information Circular, a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or

c)      has, within the 10 years before the date of this Information Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director; or

d)      has been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

e)      has been subject to any penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.

Shareholders’ Proposals for the 2022 Annual Meeting

Any proposals of holders of common shares intended to be presented pursuant to Rule 14a-8 under the Exchange Act (“Rule 14a-8”) at the annual meeting of shareholders to be held in 2022 must be received by the Company, addressed to the Secretary of the Company at Suite 310 – 815 West Hastings St., Vancouver, British Columbia V6C 1B4, by August 19, 2022 to be considered for inclusion in the Company’s proxy statement and form of proxy related to such meeting. After August 19, 2022, notice to the Company of a shareholder proposal submitted otherwise than pursuant to Rule 14a-8 will be considered untimely, and the person named in proxies solicited by the Board of Directors of the Company for its 2022 annual meeting may exercise discretionary authority voting power with respect to any such proposal as to which the Company does not receive timely notice.

Communications with the Board of Directors

Individuals may communicate with the Company’s Board by submitting a letter addressed to the member or members of the Board to whom the communication is directed, care of the Company’s Secretary, at Suite 310 – 815 West Hastings St., Vancouver, British Columbia, V6C 1B4. All such communications, other than unsolicited commercial solicitations or communications, will be forwarded to the appropriate director or directors for review.

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Director Independence

Our Board has undertaken a review of its composition, the composition of its committees and the independence of current directors and considered whether any current director has a material relationship with the Company that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities.

Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our Board has determined that each of our directors (other than Mr. Adams) is “independent” as that term is defined under the applicable rules of the SEC and NASDAQ and Canadian securities laws. In addition, our Board has determined that the directors who comprise our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, satisfy the independence standards for those committees established by applicable SEC and NASDAQ rules and Canadian securities laws.

Leadership Structure

Our Company currently separates the roles of Chief Executive Officer and Chairman of the Board. The Board believes that having an independent, non-executive chairman increases the independent oversight of the Company and enhances the Board’s objective evaluation of our CEO; provides our CEO with an experienced sounding board in the Chairman; and, provides an independent spokesperson for the Company.

Eric A. Adams was appointed to the role of Chief Executive Officer and President in June 2016. Mr. Adams has been with the Company for five years and has been a key player in driving the Company’s growth including of its research and development programs, strengthening the leadership team, implementing capital strategy and ensuring effectiveness of operations. The Board believes Mr. Adams’ primary role should be to lead and manage the day-to-day operations of the Company.

William Garner, MD was appointed Chair of the Board (the “Chair”) in March 2018. The Chair is expected to organize the Board activities to enable the Board to effectively guide, oversee and hold management accountable. To fulfill that role, the Chair is expected to create and maintain an effective working relationship with the Chief Executive Officer and other members of the Board; provide the Chief Executive Officer on-going direction as to Board needs, interests and opinions; and ensure that the Board agenda is appropriately directed to the matters of greatest importance to the Company. The Chair is expected to preserve the distinction between management and oversight, ensuring that management develops a corporate strategy and the Board reviews and expresses its views on the corporate strategy. In addition, the Chair’s roles include but are not limited to the following: (i) advising the Chief Executive Officer as to an appropriate schedule of Board meetings, (ii) seeking to ensure that the directors can perform their duties responsibly while not interfering with on-going Company operations, (iii) approving, with the Chief Executive Officer, an agenda and the meeting schedules for the Board of Directors and Board Committee meetings, (iv) advising the Chief Executive Officer as to the quality, quantity and timeliness of the information submitted to the Board by the Company’s management for the directors to perform their duties, (v) calling meetings of the directors, and (vi) acting as the principal liaison between the directors and the Chief Executive Officer on sensitive issues.

Risk Management

Our Board plays an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our Board is responsible for general oversight of risks and regular review of information regarding our risks, including operational risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The Audit Committee is responsible for overseeing the management of risks relating to credit, liquidity, accounting matters and financial reporting. The Nominating and Corporate Governance Committee is responsible for overseeing the management of risks associated with the independence of our Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through discussions from committee members about such risks.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is appointed by the Board to ensure that the Board is appropriately constituted to meet its fiduciary obligations to the Company and its stockholders. The Nominating and Corporate Governance Committee assists in monitoring and shaping the corporate governance of the Company

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and assists the Board in connection with Board nominations matters. The Nominating and Corporate Governance Committee evaluates the structure and membership of the Board and its committees and assesses the qualifications of prospective nominees to the Board. In evaluating director candidates, the Nominating and Corporate Governance Committee considers factors it deems relevant, including, at a minimum, each member and nominee’s general understanding of marketing, finance, accounting, research and development, business development or other elements relevant to the success of a publicly traded company in the current business environment, understanding of our business on an operational level, integrity, education and professional background, and willingness to devote time to the Board’s duties.

In addition, the Nominating and Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending individuals that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound business judgment using their diversity of experience, including the differences in viewpoints and skills in various areas. The Nominating and Corporate Governance Committee oversees Chief Executive Officer and senior management succession planning. The process focuses on building management depth, considers continuity and stability within the Company, and responds to the Company’s evolving needs and changing circumstances.

The Nominating and Corporate Governance Committee focuses on improving the diversity of the Board, although the Nominating and Corporate Governance Committee does not have a formal written policy regarding diversity of director nominee candidates to specifically consider diversity in regards to ethnicity, gender, race, or age in assessing the qualifications of director nominees.

The Nominating and Corporate Governance Committee periodically reviews and assesses the adequacy of the Company’s Code of Conduct and makes recommendations to the Board regarding any amendments, modifications or waivers of the provisions thereof. A copy of the most up-to-date version of our Code of Conduct is available within the “Investors” section on our website located at https://www.inmedpharma.com/about/corporate_governance/ and on SEDAR at http://www.sedar.com. A copy of our Code of Conduct is also available free of charge in print to any shareholder upon written request to Suite 310 – 815 West Hastings St., Vancouver, British Columbia, V6C 1B4, Canada, Attention: Secretary. We will post amendments to the Code of Conduct or waivers of the same for directors and executive officers on the “Investors” section on our website located at https://www.inmedpharma.com/about/corporate_governance/.

The Nominating and Corporate Governance Committee is composed of four members of the Board, each of whom meets the independence requirements under the applicable listing standards of NASDAQ, the SEC rules and the applicable Canadian securities laws. Ms. Sazdanoff (Chair), Mr. Cutler, Mr. Garner and Mr. Hull are the current members of the Nominating and Corporate Governance committee. The Board has adopted a written charter for the Nominating and Corporate Governance Committee, which is available on the Company’s website. The Nominating and Corporate Governance Committee met four times during the fiscal year ended June 30, 2021.

Shareholders desiring to make recommendations for candidacy to the Board in future years should submit such recommendations to the Secretary of the Company at Suite 310 – 815 West Hastings St., Vancouver, British Columbia, V6C 1B4, Canada. The Nominating and Corporate Governance Committee will, as a policy, evaluate candidates properly proposed by shareholders in the same manner as all other candidates.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended June 30, 2021, Andrew Hull, Willian Gardner and Catherine Sazdanoff served as members of our Compensation Committee. None of our current executive officers has served as a member of the Board of Directors, or as a member of the Compensation or similar committee, of any entity that has one or more executive officers who served on our Board of Directors or Compensation Committee during the fiscal year ended June 30, 2021.

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Meetings

The following attendance records relate to meetings of the Board, and the committees, held during the most recently completed financial year of the Company (including regularly scheduled and special meetings).

Meetings of the Board:

William Garner

 

9/9

Catherine Sazdanoff

 

8/9

Adam Cutler

 

9/9

Eric A. Adams

 

9/9

Andrew Hull

 

9/9

     

Meetings of the Audit Committee:

   

Adam Cutler

 

8/8

Catherine Sazdanoff

 

7/8

Andrew Hull

 

8/8

     

Meetings of the Compensation Committee:

   

Andrew Hull

 

5/5

William Garner

 

5/5

Catherine Sazdanoff

 

4/5

 

Meetings of the Nominating and Corporate Governance Committee:

William Garner

 

4/4

Catherine Sazdanoff

 

3/4

Adam Cutler

 

4/4

Andrew Hull

 

4/4

The Board of Directors unanimously recommends that the Shareholders vote “FOR” the election of each proposed Director.

Unless contrary instructions are indicated on the Form of Proxy or the voting instruction form, or such authority is withheld, the persons designated in the accompanying Form of Proxy or voting instruction form intend to vote “FOR” the election, as Director, of the persons whose names are set forth above and identified in the accompanying Form of Proxy or the voting instruction form, as applicable.

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Executive Compensation

This Compensation Discussion and Analysis describes the objectives and design of the Company’s compensation program for our 2021 named executive officers (NEOs), who are as follows:

Eric. A. Adams

 

President and CEO.

Bruce Colwill

 

Chief Financial Officer & Secretary

Alexandra Mancini

 

Senior VP, Clinical & Regulatory Affairs

Compensation Discussion and Analysis

General

The Company is committed to growing its business over the long-term. As a result of the competitive nature of the industry in which the Company operates, executives have significant career mobility and as a result, the competition for experienced executives is great. The existence of this competition and the need for talented and experienced executive officers to realize the Company’s business objectives underlies the design and implementation of the Company’s compensation programs. At the same time, the Company seeks to keep its approach to compensation simple and streamlined to reflect the growing but still relatively small size of the Company.

For the purpose of this Statement of Executive Compensation:

“compensation securities” includes stock options, convertible securities, exchangeable securities and similar instruments granted or issued by the company or one of its subsidiaries for services provided or to be provided, directly or indirectly, to the company or any of its subsidiaries;

“NEO” or “named executive officer” means, as an “emerging growth company,” as such term is defined in the rules promulgated under the Securities Act of 1933, each individual who served as our principal executive officer during our fiscal year 2021, and our next two most highly compensated executive officers in respect of their service to our company for fiscal year 2021.

“Underlying securities” means any securities issuable on conversion, exchange or exercise of compensation securities.

All currency references herein are expressed in Canadian Dollars unless otherwise specified.

Objectives

The objectives of the Company’s compensation program are to:

•        attract and retain qualified executive officers via a competitive compensation package;

•        incentivize executive officers to deliver strong business performance;

•        align the interests of the executive officers with the interests of Shareholders to create Shareholder value by ensuring a significant portion of executive compensation is dependent upon individual and overall business performance; and

•        ensure the executive compensation program is simple to communicate and administer.

InMed’s compensation program is designed to reward personal competencies as they pertain to the specific position for which the person is employed and overall contribution to building the company’s business including the science and the R&D pipeline towards commercialization.

As such, the Company has included several factors to assist in developing its compensation philosophy:

•        Using a consistent compensation structure among executive officers to encourage aligned goals;

•        Including financial regulatory compliance as a performance metric to encourage accountability, as and when appropriate;

•        Compensation in line with the company’s financial position;

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•        Incentive plan awards that include long-term metrics to avoid short-sighted decisions;

•        Anti-hedging policies in order to prohibit directors and senior management from directly or indirectly hedging against future declines in the securities of the Company; and

•        Periodically retaining independent compensation consultants to provide benchmarks and additional perspective.

While the Company’s objective is to reward for performance and remain competitive in the marketplace for executive talent, the Company carefully considers the expense of compensation and benefits in relation to the Company’s consolidated budget and financial strength as significant factors in determining compensation levels.

The Company intends to keep its compensation program simple to communicate and administer by focusing on base salary, short-term incentives, and long-term incentives. Directors and executive officers are encouraged to increase their ownership interest in the Company in order to, among other things, better align their interests with those of Shareholders. See “Executive Compensation — Elements of Compensation”. The Company does not currently have a pension plan.

Compensation Principles

The Company’s overall approach to compensation is to provide senior executives with total compensation that is generally competitive with compensation provided to individuals working in similar positions in the biopharmaceutical industry in Canada and the U.S. To best define what a ‘competitive compensation package’ would be, the Company undertook a comprehensive analysis of its compensation practices during 2020. At the behest of the Board of Directors, the Compensation Committee engaged an external consulting agency, AON/Radford, to advise on its approach to compensation for executives and the Board of Directors. The results of this exercise are detailed in the sections below.

In determining all aspects of executive compensation, the Compensation Committee / Board engages in discussion with the CEO and CFO to align compensation with the skill set, experience, and performance of the executive team members. The Compensation Committee / Board also rely on input from third party assessments in determining compensation ranges for each executive. Current compensation targets have been established utilizing the AON/Radford compensation assessment undertaken by the Company in 2020. The assessment included several variables across comparable companies in the pharmaceutical industry to determine a proper compensation range for each executive. Variables included (but were not limited to): size of the company (as measured by number of employees), stage of company pipeline development (bio/pharma pre-commercial), market capitalization of the company, amount of invested capital, private vs. public entities, etc. Once a range was determined for each position, the employee’s specific compensation level was set based on variables such as experience and importance to the overall corporate success.

The AON/Radford compensation assessment determined the most similar industry comparables to arrive at a competitive compensation level. The assessment included data from a total of 48 public, pre-commercial biopharmaceutical companies with under 50 employees and market capitalization less than $300 million.

This assessment benchmarked the 25th, 50th and 75th percentile of salary levels, cash bonus levels (% of base salary), and equity levels. The Compensation Committee is currently aiming to target cash compensation (salaries plus bonus) somewhat below the 25th percentile and equity-based compensation at the 50th percentile of this benchmark data set. The net effect is to conserve cash for R&D programs based on lower cash compensation of this benchmark while strongly aligning executive interests with those of shareholders by establishing significant equity-based compensation levels.

Compensation Components

There are three main elements of InMed’s executive compensation program: base salary, annual performance-based cash bonus, and equity-based awards in the form of stock options that reflect the Company’s operating results as well as achievement of significant strategic initiatives. Equity-based awards enable the Company to attract and retain executive talent by aligning the executives’ interests with the Company’s long-term corporate objectives. Additionally, the Company offers to all employees extended health insurance. In certain instances, employee expenses for other minor business-related expenses are reimbursed (cell phones, parking, etc.).

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Base Salary

The Company’s executives are currently compensated based on fixed, or ‘base’, salary paid semi-monthly in arrears. In establishing salaries for the Company’s CEO and other executive officers, consideration is given to salary ranges for comparable positions in similar size and stage biotechnology companies. Data for such comparisons is obtained from the evaluation of compensation against industry peers including those with a similar market capitalization and in the business of biotechnology. In setting salaries within competitive ranges, the Company considers performance related factors including the Company’s overall results during the past year and its performance relative to a budgeted plan or stated objectives. Consideration also is given to an individual’s contribution to the Company and the accomplishments of departments for which that officer has management responsibility, and the potential for future contributions to the Company. Overall, salaries are currently targeted somewhat below the 25th percentile. Over time, the Company intends to move towards the 25th percentile.

Cash Bonus

A cash bonus system has been developed by the Company to encourage the achievement of critical success factors, or goals, of the Company. The target bonus level is determined by position and typically ranges from 30%-40% of base salary for the Company’s executives with the CEO having a target bonus of 50%. Goals are determined by the direct supervisor of each employee, in discussion with the CEO and, ultimately, the Compensation Committee and Board of Directors.

The goals for each position are split into two segments: Task Achievement and Personal Effectiveness. The Task portion is heavily weighted (75%) and aligns with the overall corporate objectives. The Personal Effectiveness (25%) portion analyzes several criteria for each employee such as Initiative, Problem Solving, Teamwork, Integrity, and Leadership, among other criteria. Scoring for both sections are combined to determine what percentage of the employee’s target bonus will be paid, if any.

An example:

Task Achievement (50/75) + Personal Effectiveness (23/25) = Goal Achievement Score (73%);

Goal Achievement Score (73%) x Target Bonus (30%) x Base Salary ($100,000) = Cash Bonus ($21,900)

The payment of cash bonuses to employees, if any, is based on several factors as determined by the Board of Directors. Key elements include:

•        The Company’s financial position. As determined solely by the Board of Directors, the Company’s current cash position relative to anticipated R&D expenditures, ability to raise additional capital and other factors play a large role in the payment of any bonuses to any employees.

•        Achievement of critical goals. Should the company fail to reach its key corporate strategic goals, as defined by the Board, then the payment of any cash bonuses to any employee, regardless of their specific role within the company, may be negatively impacted such that the Board may determine that no bonuses be paid to anyone.

•        As outlined above, Task Achievement and Personal Effectiveness.

Additionally, the Board has the sole discretion to award a bonus to any individual employee beyond the target bonus amount based on significantly exceeding their goals, or through accomplishment of objectives well beyond the scope of their role.

Share-based and option-based awards

The Compensation Committee of the Board of Directors of InMed believes that equity-based compensation is an important component of InMed’s overall compensation structure. Based on the data from the recent compensation assessment, the Compensation Committee has determined that in order to present executives with a competitive package, the equity positions (via stock option grants) needed to target company ownership levels at the 50th percentile to offset the lower range of salaries. The Compensation Committee believes this approach will better align executives with the long-term prospects of the Company.

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In accordance with the Compensation Committee’s charter, any equity award to employees is recommended by the Compensation Committee and submitted for approval by the full Board of Directors. In addition to regularly scheduled grants, the CEO may make a recommendation for other grants (referred to herein as “off-cycle grants”) in situations where InMed is seeking to attract a senior level hire, recognize employees for certain achievements or in other special circumstances.

Annual and Off-Cycle Stock Option Grants

The Committee believes that establishing fixed grant dates for the award of equity grants as we move forward is an important practice to ensure the consistency of the award granting process. Accordingly, each annual grant and off-cycle grant of equity-based compensation shall be awarded as follows:

•        Annual Grant. A grant of equity-based compensation awards for employees shall be approved annually by the Compensation Committee / Board.

•        Off-Cycle Grants. Off-cycle grants shall be recommended in writing by the Chief Executive Officer to the Compensation Committee / Board and shall be granted on an as-needed basis throughout the year.

•        Other Awards. With respect to awards other than the annual grant or off-cycle grants, the date the Compensation Committee acts to approve an award, or such later specified date as the Compensation Committee shall designate in the approval, shall be used as the grant date of the award for purposes of InMed’s equity compensation plans. If action is taken by written consent in lieu of a meeting, the date of the Compensation Committee action shall be the date that the last Compensation Committee member has executed the consent.

Director Compensation

Director compensation is limited strictly to non-management directors. InMed’s director compensation philosophy is as follows:

•        To provide a compensation level that will attract exceptionally experienced and skilled candidates and encourage them to play an active role in the strategic development of the Company;

•        To compensate for Board work and work on Board committees; and

•        To provide stock-based compensation to align director compensation with increases in long-term shareholder value.

Stock-Based Compensation

In addition to any stock options granted to new directors upon becoming a member of the board, on an annual basis and immediately after election of directors at each Annual General Meeting (“AGM”), each non-management director shall be granted stock options to purchase 7,000 Common Shares, priced as of the close of market on the date of the Company’s AGM, vesting 100% on the one year anniversary of the grant date or immediately prior the following year’s AGM, whichever is sooner, and expiring five years after date of grant.

Annual Cash Retainers

Prior to March 1, 2021, each non-employee director received an annual retainer of $25,000 per year paid quarterly in arrears. Additionally, the Chair of the Board received an additional $25,000 per year paid quarterly in arrears. Effective March 1, 2021, each non-employee director’s annual retainer was increased to $35,000 per year and the Chair of the Board’s additional retainer remained unchanged at $25,000 per year.

For committee participation, directors are eligible to receive up to an additional $15,000 per year paid quarterly in arrears, assuming a minimum of two committee memberships. There are no incremental fees for chairing a committee.

There are no other compensation elements for directors such as meeting fees and per diems. If a Director traveled on behalf of our Company, they are reimbursed for reasonable out-of-pocket expenses.

19

The following table summarizes Director compensation as at June 30, 2021:

InMed Directors
(all figures in US$)

 

Annual
Director Fee

 

Annual
Chairman Fee

 

Committee(1)

 

Annual
Committee
Memberships
Fee

 

Total Annual
Fees

William Garner, MD

 

$

35,000

 

$

25,000

 

C,G

 

$

15,000

 

$

75,000

Catherine Sazdanoff

 

$

35,000

 

 

 

A,C,G

 

$

15,000

 

$

50,000

Andrew Hull

 

$

35,000

 

 

 

A,C,G

 

$

15,000

 

$

50,000

Adam Cutler

 

$

35,000

 

 

 

A,G

 

$

15,000

 

$

50,000

Eric A. Adams

 

 

 

 

 

 

 

 

$

0

____________

(1)      A = Audit; C= Compensation; G = Governance and Nomination. Bold = Chair

InMed Compensation Committee

The Compensation Committee acts on behalf of the Board of Directors of InMed to determine and approve the compensation of executive officers of the Company and to provide oversight of the Company’s global compensation philosophy. The committee oversees the Company’s compensation plans, including equity compensation plans and plans applicable to Directors and senior management. The purpose of the Compensation Committee is also to establish a plan of continuity for executives and other key employees, and to ensure a broad plan of executive compensation is established that is competitive and incentivizing in order to attract and retain the executive management and other key employees of InMed and to oversee compliance by Executive Management with the Company’s Code of Conduct.

The Compensation Committee is currently comprised of three members, all of whom are “independent” under the applicable rules and regulations of the SEC and Nasdaq and applicable Canadian securities laws. These members currently include Andrew Hull (Chair), Catherine Sazdanoff and William Garner, MD. Each of these individuals has extensive executive experience in biotech and pharmaceuticals companies, has been involved in establishing compensation for executive level employees, and has direct experience in negotiating executive employment agreements. Additionally, they have been entrusted on behalf of their respective organizations to make important strategic decisions as they pertain to proper resource allocation to maximize the likelihood of corporate success.

Any Compensation Committee member may be removed or replaced at any time by the Board and shall cease to be a member upon ceasing to be a Director of the Company. Each member shall hold office until the close of the next annual meeting of shareholders of the Company or until the member resigns or is replaced, whichever first occurs.

The Compensation Committee is required to meet at least annually, but currently meets at least quarterly. Additional meetings may be held as deemed necessary by the Committee Chair or as requested by any member. A quorum for the transaction of business at all meetings of the Compensation Committee is a majority of the authorized number of members. Questions arising at any meeting shall be determined by a majority of votes of the members present, and in case of an equality of votes the Chair shall have a second casting vote.

The Chair of the Compensation Committee shall:

(a)     Call and conduct the meetings of the Compensation Committee.

(b)    Be entitled to vote to resolve any ties.

(c)     Prepare and forward to members of the Compensation Committee the agenda for each meeting of the Compensation Committee, and include, in the agenda, any items proposed for inclusion in the agenda by any member of the Compensation Committee.

(d)    Review with the CEO the Company’s policies and strategies in determining the compensation of its Executive Management.

(e)     Engage, on behalf of the Compensation Committee and the Board, independent consultants to advise the Compensation Committee on the compensation strategies and policies of the Company.

(f)     Appoint a secretary to take minutes of the meetings of the Compensation Committee.

(g)     Ensure that the Compensation Committee meetings are conducted in an efficient, effective and focused manner.

20

Subject to the powers and duties of the Board, the Board has delegated to the Compensation Committee the following powers and duties to be performed by the Compensation Committee on behalf of and for the Board. The Compensation Committee shall:

(a)     Review the organizational structure and report any significant organizational changes, along with the Compensation Committee’s recommendations, to the Board.

(b)    Review and approve corporate goals and objectives relevant to CEO compensation, evaluating the CEO’s performance in light of those corporate goals and objectives, and determining (or making recommendations to the Board with respect to) the CEO’s compensation level based on this evaluation.

(c)     Review the compensation philosophy and guidelines for Executive Management, for recommendation to the Board for its consideration and approval.

(d)    Review and recommend the compensation of each member of Executive Management and report its broad conclusions to the Board for its consideration and approval.

(e)     Recommend to the Board for consideration and approval any short-term incentive plan, long term incentive plan, stock option plan, omnibus securities-based compensation or other incentive plan, pension plan or employee benefit plan to be granted to Executive Management and guidelines with respect thereto.

(f)     With respect to the granting of securities-based compensation to Executive Management:

(i)     in conjunction with management, administer such incentive plans or other benefit plans as determined and established by the Board to be granted to Executive Management;

(ii)    review management’s recommendations for and, subject to confirmation by the Board, approve the granting of securities-based awards under any incentive plan to Executive Management and other key employees of the Company and its direct and indirect subsidiaries; and

(iii)   suggest and review any amendments which the Compensation Committee considers necessary to any incentive plan and make recommendations to the Board with respect to those amendments; provided, however, that all amendments to such plans shall be subject to the consideration and approval of the Board.

(g)    Recommend the Directors’ compensation plan to the Board.

(h)    Within any guidelines established by the Board:

(i)     in conjunction with management, administer the matching contribution plan, if any; and

(ii)    suggest and review any amendments which the Compensation Committee considers for the matching contribution plan, if any, and make recommendations to the Board for the consideration and approval of the Board; provided, however, that all amendments to such plans be subject to the consideration and approval of the Board.

(i)     Subject to the approval of the Board, review and approve benefits other than those applicable to employees generally to be granted to Executive Management including levels and types of benefits.

(j)     Approve and recommend to the Board any changes in the benefit provisions of any pension plan.

(k)    Consider and make recommendations to the Board for its approval all matters concerning incentive awards, perquisites and other remuneration matters with respect to Executive Management.

(l)     Oversee the selection of and terms of reference for outside consultants to review the Executive Management and Board compensation programs as appropriate.

21

(m)   With respect to board of directors of unrelated corporations which operate for profit and which compensate members of their board and/or significant commitments with respect to non-profit organizations:

(i)     review a limit on the number of such board on which individual members of senior management may participate;

(ii)    receive notice of proposed membership by a member of senior management and upon consultation with the CEO have a right to object to such membership; and

(iii)   confirm in writing, through the CEO, to such member of senior management that the Company shall not indemnify the employee nor be exposed to liability with respect to the employee’s participation on such board.

(n)    Review and approve executive and Board compensation disclosure in the annual information circular and other disclosure documents before such information is publicly disclosed.

(o)    Have such other powers and duties as delegated to it by the Board.

(p)    The Compensation Committee may annually develop a calendar of activities or forward agenda to be undertaken by the Compensation Committee for each ensuing year and to submit the calendar/agenda in the appropriate format to the Board of Directors following each annual general meeting of shareholders.

The Compensation Committee shall report to the Board at its next regular meeting all such action it has taken since the previous report.

The Compensation Committee is authorized to request the presence at any meeting, but without voting rights, of a representative from the external advisors, senior management, legal counsel or anyone else it considers to be able contribute substantively to the subject of the meeting and assist in the discussion and consideration of the business of the Committee, including Directors, officers and employees of the Company. The Compensation Committee Charter, as approved by the Board on April 22, 2020, is available on the Company’s website.

Compensation Governance and Risk Assessment

The Board of Directors and the Compensation Committee have not formally considered the implications of the risks associated with the Company’s compensation policies and practices. Although the Company does not have formal policies specifically targeting risk-taking in a compensation context, the practice of management and the Board is to consider all factors relating to an executive officer’s performance, including any risk mitigation efforts or excessive risk-taking, in determining compensation. Such risks, however, are mitigated by the Board’s active involvement at the strategic level of the Company’s businesses, including:

•        annual approval of the Company’s operational and capital budgets and results;

•        frequent discussions between Board members and with management; and

•        approval of business opportunities as they arise, including a review of the partnering process and undertaking of due diligence.

The Board of Directors’ oversight helps to ensure proper monitoring of the level of risk-taking by management. This allows the Board to be responsive to management’s potential bias towards achieving short-term goals at the expense of long-term sustainability and Shareholders’ value. Furthermore, the Compensation Committee and the Board can use their discretion when assessing both an individual Named Executive Officer’s and the Company’s overall performance.

22

InMed has developed an Employee Handbook that contains corporate policies and guidelines for professional behaviour. The Company policies and practices apply to all employees, regardless of title. These guidelines include Code of Conduct, Terms of Reference for Board of Directors and all Committees, and policies for corporate disclosure, insider trading, whistle blower.

Under the Company’s Insider Trading Policy, executive officers and Directors are not permitted to purchase financial instruments (including prepaid variable contracts, equity swaps, collars or units of exchange funds) that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held directly or indirectly by the executive officer or Director. Specifically, to the issue of hedging/speculation in the Company’s securities, the Insider Trading Policy states:

Speculating in Securities. Directors, officers, and employees of the Company shall not:

(i)     short-sell securities of the Company or its affiliates (i.e., sell securities that they do not yet own), except in limited circumstances permitted by corporate and securities laws; and

(ii)    buy put options, or sell call options, on securities of the Company or its affiliates.

In fiscal 2021, the Compensation Committee did not identify any significant risks arising from the Company’s executive compensation programs that are reasonably likely to have a material adverse effect on the Company.

2021 Summary Compensation Table

Name and principal position

 

Fiscal
year

 

Salary
($)

 

Bonus
($)

 

Share-based
awards
($)

 

Option-based
awards
(1)
($)

 

Total
compensation
($)

Eric A. Adams

 

2021

 

327,809

 

160,627

 

 

246,725

 

735,161

President and CEO Director

 

2020

 

287,257

 

136,500

 

 

 

423,757

Bruce Colwill2

 

2021

 

273,597

 

123,941

 

 

118,428

 

515,966

CFO & Secretary

 

2020

 

202,762

 

85,830

 

 

140,761

 

429,353

Alexandra Mancini

 

2021

 

252,346

 

84,788

 

 

69,083

 

406,217

Senior VP, Clinical & Regulatory Affairs

 

2020

 

230,133

 

78,058

 

 

 

308,191

____________

NOTES:

(1)      The amounts reported represent the aggregate grant date fair value of the stock options awarded to the non-employee directors in the fiscal year 2021, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in this column are set forth in note 7 of our consolidated financial statements included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be received upon the exercise of the stock options or any sale of the underlying common shares.

(2)      Bruce Colwill was appointed Chief Financial Officer on August 9, 2019.

The Company, during the most recently completed year ended June 30, 2021, had the following formal employment agreements with its NEOs. See “Termination and Change of Control” for further details.

23

Adams Contract

On June 15, 2016, the Company entered into an employment agreement with Eric A. Adams with an effective date of June 16, 2016 providing for compensation at an initial annual base salary of C$120,000. The employment agreement provided that Mr. Adams’ base salary would increase upon the achievement of certain capital raising initiatives. Upon achievement of these milestones, Mr. Adams’ base salary increased to C$220,000 effective November 1, 2016, and further increased to C$280,000 effective March 1, 2017. Effective January 1, 2018, the Board approved an increase in Mr. Adams’ base salary to $241, 792 per annum. After the Board completed a compensation assessment, effective April 1, 2018, Mr. Adams’ base salary was increased to $287,128 per annum and was again reviewed and increased to $283,020 effective July 1, 2019. On March 1, 2021, in conjunction with the development of an updated form of employment agreement with each then current employee of the Company, the Company entered into a new employment agreement with Mr. Adams at which time his base salary was increased to $390,912. Consistent with his previous employment agreement, his new employment agreement provides that he is eligible to be considered for an annual discretionary bonus which will be subject to the approval of the Board and the compensation committee of, in their sole discretion, on an annual basis in accordance with our annual performance and compensation review process. Additionally, other benefits included eligibility to participate in the Company’s insurance benefits plan, if any, and vacation entitlement of 30 days per calendar year.

Colwill Contract

The Company entered into an employment agreement with Mr. Colwill effective August 9, 2019 providing for compensation at an initial annual base salary of $227,473. On March 1, 2021, in conjunction with the development of an updated form of employment agreement with each then current employee of the Company, our Company entered into a new employment agreement with Mr. Colwill at which time his base salary was increased to $325,760. Consistent with his previous employment agreement, his new employment agreement provides that he is eligible to be considered for an annual discretionary bonus which will be subject to the approval of the Board and the compensation committee, in their sole discretion, on an annual basis in accordance with our annual performance and compensation review process. Additionally, other benefits included eligibility to participate in the Company’s insurance benefits plan, if any, and vacation entitlement of 30 days per calendar year.

Mancini Contract

Effective October 28, 2016, the Company entered into an employment agreement with Ms. Mancini providing for an initial base salary of C$140,000 for a part-time commitment. Furthermore, the employment agreement provides for an initial grant of 12,121 stock options granted in accordance with our stock option plan an which vested over 18 months (granted, see details in “Outstanding Option-Based and Share-Based Awards” table). On April 1, 2018, Ms. Mancini’s base salary was increased to C$225,000 for a 75% time commitment and on January 1, 2019, her base salary was increased to C$300,000 for a 100% time commitment. Effective July 1, 2019, her salary was increased to $226,739. On March 1, 2021, in conjunction with the development of an updated form of employment agreement with each then current employee of the Company, the Company entered into a new employment agreement with Ms. Mancini at which time her base salary was increased to $280,968. Consistent with her previous employment agreement, her new employment agreement provides that she is eligible to be considered for an annual discretionary bonus which will be subject to approval of the Board and the compensation committee, in their sole discretion, on an annual basis in accordance with our annual performance and compensation review process. Additionally, other benefits included eligibility to participate in the Company’s insurance benefits plan, if any, and vacation entitlement of 30 days per calendar year.

24

Incentive Plan Awards

Outstanding Equity Awards at Fiscal Year-End

The following table presents information regarding outstanding equity awards held by our NEOs as of June 30, 2021:

 

Option Awards

Name

 

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

 

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable

 

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

 

Option
Exercise Price
(C$)
($)

 

Option
Expiration
Date
($)

Eric A. Adams

 

13,636

(1)

 

 

 

 

14.85

 

6/2/2022

   

13,636

(2)

 

 

 

 

51.15

 

3/8/2023

   

45,455

(3)

 

 

 

 

33.66

 

5/16/2023

   

14,242

(4)

 

 

 

 

14.36

 

5/27/2024

   

31,250

(5)

 

93,750

(5)

 

 

3.85

 

12/15/2025

     

 

   

 

           

Alexander Mancini

 

12,121

(6)

 

 

 

 

6.44

 

10/28/2021

   

3,030

(7)

 

 

 

 

12.21

 

2/20/2022

   

1,515

(8)

 

 

 

 

14.85

 

6/2/2022

   

1,515

(9)

 

 

 

 

51.15

 

3/8/2023

   

12,121

(10)

 

 

 

 

33.66

 

5/16/2023

   

1,515

(11)

 

 

 

 

16.83

 

1/21/2024

   

6,060

(12)

 

 

 

 

14.36

 

5/27/2024

   

8,750

(13)

 

28,250

(13)

 

 

3.85

 

12/15/2025

     

 

   

 

           

Bruce Colwill

 

15,152

(14)

 

15,151

(14)

 

 

8.91

 

8/9/2024

   

15,000

(15)

 

45,000

(15)

 

 

3.85

 

12/15/2025

____________

NOTES:

(1)      These options vest as to 25% after 6 months from the June 2, 2017 grant date, 25% after 12 months from the June 2, 2017 grant date, 25% after 18 months from the June 2, 2017 grant date and 25% after 24 months from the June 2, 2017 grant date.

(2)      These options vest as to 25% after 6 months from the March 8, 2018 grant date, 25% after 12 months from the March 8, 2018 grant date, 25% after 18 months from the March 8, 2018 grant date and 25% after 24 months from the March 8, 2018 grant date.

(3)      These options vest as to 25% after 6 months from the May 16, 2018 grant date, 25% after 12 months from the May 16, 2018 grant date, 25% after 18 months from the May 16, 2018 grant date and 25% after 24 months from the May 16, 2018 grant date.

(4)      These options vest as to 25% after 6 months from the May 27, 2019 grant date, 25% after 12 months from the May 27, 2019 grant date, 25% after 18 months from the May 27, 2019 grant date and 25% after 24 months from the May 27, 2019 grant date.

(5)      These options vest as to 25% after 6 months from the December 16, 2020 grant date, 25% after 12 months from the December 16, 2020 grant date, 25% after 18 months from the December 16, 2020 grant date and 25% after 24 months from the December 16, 2020 grant date.

(6)      These options vested over the 18 month period following the October 28, 2016 grant date.

(7)      These options vested over the 24 month period following the February 20, 2017 grant date.

(8)      These options vested over the 24 month period following the June 2, 2017 grant date.

(9)      These options vested over the 24 month period following the March 8, 2018 grant date.

(10)    These options vested over the 24 month period following the May 16, 2018 grant date.

25

(11)    These options vest as to 25% after 6 months from the January 21, 2019 grant date, 25% after 12 months from the January 21, 2019 grant date, 25% after 18 months from the January 21, 2019 grant date and 25% after 24 months from the January 21, 2019 grant date.

(12)    These options vest as to 25% after 6 months from the May 27, 2019 grant date, 25% after 12 months from the May 27, 2019 grant date, 25% after 18 months from the May 27, 2019 grant date and 25% after 24 months from the May 27, 2019 grant date.

(13)    These options vest as to 25% after 6 months from the December 16, 2020 grant date, 25% after 12 months from the December 16, 2020 grant date, 25% after 18 months from the December 16, 2020 grant date and 25% after 24 months from the December 16, 2020 grant date.

(14)    These options vest as to 25% after 12 months from the August 9, 2019 grant date, 25% after 18 months from the August 9, 2019 grant date, 25% after 24 months from the August 9, 2019 grant date and 1,894 stock options will vest every 3 months commencing 27 months after the date of the August 9, 2019 grant date.

(15)    These options vest as to 25% after 6 months from the December 16, 2020 grant date, 25% after 12 months from the December 16, 2020 grant date, 25% after 18 months from the December 16, 2020 grant date and 25% after 24 months from the December 16, 2020 grant date.

Stock Option Plan

Pursuant to the 2017 Stock Option Plan, approved by the shareholders of the Company at the Company’s special meeting on March 24, 2017 and amended on November 20, 2020 (the “Option Plan”), the Board of Directors of the Company may, from time to time, in its discretion and in accordance with the exchange requirements, grant to Directors, officers, employees and consultants of Company (the “Optionee”), non-transferable options to acquire Common Share (the “Options”) to purchase Common Shares, provided that the number of Common Shares reserved for issuance will not exceed twenty percent (20%) of the issued and outstanding Common Shares at the date the Options are granted (on a non-diluted basis), exercisable for a period of up to ten (10) years from the date of grant.

The exercise price and the term of Options are determined by the Board of Directors and are subject to approval by the exchange. However, the exercise price cannot be lower than the greater of the closing market prices of the Common Shares on the trading day prior to the date of grant of the Options and the date of grant of the Options.

In the event an Optionee dies prior to the expiry of his option, his legal representatives may, by the earlier of:

a)      one year from the date of the Optionee’s death (or such lesser period as may be specified by the Board at the time of granting the option); and

b)      the expiry date of the option;

exercise any portion of such option.

If an Optionee ceases to be a Director, officer, employee or consultant for any reason other than death, his Option shall terminate as specified by the Board at the time of granting the Option, and all rights to purchase Common Shares under such Option shall cease and expire and be of no further force or effect.

Subject to exchange policies, if any Option granted under the Option Plan shall expire or terminate for any reason without having been exercised in full, such unexercised Options shall become available for future Option grants under the Option Plan.

The Board of Directors may amend the Option Plan, subject to, as the case may require, the approvals of the exchange, or the Optionees who have been granted Options.

The full text of the Option Plan is available at www.sec.gov and will be supplied free of charge to Shareholders upon written request made directly to the Company at its registered head office located at Suite 310 – 815 West Hastings St., Vancouver British Columbia, V6C 1B4, Attention: President and CEO.

26

Pension Plan Benefits

During the Company’s most recently completed financial year, the Company and its direct and indirect subsidiaries did not have a defined benefit plan, deferred contribution plan, deferred compensation plan or pension plan.

Termination and Change of Control Benefits

The Company does not have any pension or retirement plan which is applicable to the NEO’s. The Company has not provided compensation, monetary or otherwise, during the most recently completed financial year June 30, 2021, to any person who now or previously has acted as an NEO of the Company, in connection with or related to the retirement, termination or resignation of such person, and the Company has provided no compensation to any such person as a result of a change of control of the Company. In the case of resignation, retirement or termination of employment with cause, every NEO contract provides there will be no severance payment made. However, the NEO would be entitled to any vacation due.

The Company has employment agreements with its NEOs which include termination and change of control provisions as described herein below. The change of control provisions recognize the critical nature of these positions and the individuals involved and the requirement to protect the individuals from disruption to their engagement in the event of a change of control of the Company. The change of control provisions are designed to treat the individuals in a manner consistent with industry standards for executives in similar positions.

For the purposes of the employment agreements with the NEOs, “Change in Control” is defined as (i) the sale of all or substantially all of the assets of the Company to an unrelated person or entity; (ii) a merger, reorganization, or consolidation involving the Company in which the shares of the voting stock outstanding immediately prior to the transaction represent or are converted into or exchanged for securities of the surviving or resulting entity that immediately upon completion of the transaction, represents 51% or less of the outstanding voting power of the surviving or resulting entity; (iii) the acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a person or group of persons; or (iv) any other acquisition of the business of the Company, as determined by the Board (but any public offering by the Company or another capital raising event, or a merger effected solely to change the Company’s domicile does not constitute a Change of Control).

For the purposes of the employment agreements with the NEOs and in the context of a Change of Control, “Good Reason” is defined as the occurrence of any of the following events without the NEO’s prior written consent: (i) a change in the NEO’s position which materially reduces the NEO’s responsibilities from the responsibilities in effect immediately prior to the Change of Control; (ii) a reduction by the Company of the NEO’s base salary or target bonus percentage, except for an across-the-board salary reduction affecting all senior executives of the Company; or (iii) a relocation of the NEO’s principal place of employment by more than 30 kilometres.

The employment agreements with the NEOs provide that if, following a Change of Control, the Company terminates the NEO’s employment with the Company without cause or the NEO resigns from his/her employment with the Company for Good Reason, then the NEO will be entitled to a Change in Control Severance Amount.

The actual amounts that a Named Executive Officer would receive upon termination of employment can only be determined at the time of termination and is based on the number of months of base salary at that time. The following table provides a description of the severance requirements and the estimated corresponding value that the Named Executive Officers that were employed by the Company at the end of the financial year would have received if the termination had occurred on June 30, 2021:

 

Termination without cause

 

Change of Control

   

Description(1)

 

Value
($)

 

Description(1)

 

Value
($)

Eric A. Adams
President and CEO Director

 

24 month’s salary plus Average Bonus Payment

 

912,249

 

24 month’s salary plus Average Bonus Payment

 

912,249

Bruce Colwill
CFO & Secretary

 

12 month’s salary plus Average Bonus Payment

 

430,646

 

12 month’s salary plus Average Bonus Payment

 

430,646

Alexandra Mancini
Senior VP, Clinical & Regulatory Affairs

 

12 months’ Base Salary plus Average Bonus Payment

 

354,841

 

12 month’s salary plus Average Bonus Payment

 

354,841

____________

(1)      Average Bonus Payment is equal to the average of the actual bonus payments, if any, made to the NEO from the previous 3 years preceding the date of termination, pro-rated for the then current year up to and including the date of termination.

27

Director Compensation

The Company currently pays cash compensation to non-management directors as outlined in the earlier section “Director Compensation — Annual Cash Retainers”. In addition, the Directors are reimbursed for expenses occurred in carrying out their duties as Directors and are granted stock options.

The Company has a formalized Option Plan for the granting of incentive stock options to the officers, employees and Directors. The purpose of granting such options is to assist the Company in compensating, attracting, retaining and incentivizing the Directors of the Company and to closely align the personal interests of such persons to that of the shareholders. The granting of incentive options allows the Company to reward Directors’ efforts to increase value for shareholders without requiring the Company to use cash from its treasury.

The following table summarizes the compensation of the Directors for the financial year ended June 30, 2021:

Name

 

Fees
earned
($)

 

Share-based
awards
($)

 

Option-
based
awards
($)

 

Non-equity incentive
plan compensation
($)

 

Pension
value
($)

 

All other
compensation
($)

 

Total
compensation
($)

Annual
incentive
plans

 

Long-term
incentive
plans

 

William J. Garner

 

68,333

 

 

12,790

 

 

 

 

 

81,123

Adam Cutler

 

43,333

 

 

12,790

 

 

 

 

 

56,123

Andrew Hull

 

43,333

 

 

12,790

 

 

 

 

 

56,123

Catherine Sazdanoff

 

43,333

 

 

35,025

 

 

 

 

 

78,358

Outstanding Option-Based and Share-Based Awards

The following table sets out the option-based and Share-based awards outstanding as at June 30, 2021 for the Directors:

Name

     

Option-based awards

         

Share-based awards

Number of
securities
underlying
unexercised
options
(#)

 

Option
exercise
price
($)

 

Option
expiration
date

 

Value of
unexercised
in-the-money
options
(1)
($)

 

Number of
Shares that
have not
vested
(#)

 

Market or
payout
value of
Share-based
awards that
have not
vested
($)

 

Market or
payout value
of vested
Share-based
awards not
paid out or
distributed
($)

William J. Garner

 

24,242

 

4.290

 

June10,2021

         

   
   

1,061

 

16.500

 

Jan.14,2024

 

103,998

 

 

 

   

1,061

 

8.250

 

Jan.11,2025

 

 

1,061

 

 

   

7,000

 

3.85

 

December15,2025

     

     

                             

Adam Cutler

 

6,061

 

4.785

 

Nov.23,2020

 

23,001

 

 

 

   

1,515

 

4.620

 

Nov.27,2020

 

5,999

 

 

 

   

22,727

 

3.630

 

July26,2021

 

112,499

 

 

 

   

1,061

 

16.500

 

Jan.14,2024

 

 

 

 

   

1,061

 

8.250

 

Jan.11,2025

 

350

 

1,061

 

 

   

7,000

 

3.85

 

December15,2025

               
                             

Andrew Hull

 

30,303

 

3.630

 

Sept.12,2021

 

150,000

 

 

 

   

1,061

 

16.500

 

Jan.14,2024

 

 

1,061

 

 

   

1,061

 

8.250

 

Jan.11,2025

 

350

     

 

   

7,000

 

3.85

 

December15,2025

               
                             

Catherine Sazdanoff

 

3,030

 

10.890

 

July1,2019

 

 

2,104

 

 

   

1,061

 

8.250

 

Jan.11,2025

 

350

 

1,061

 

 

   

11,000

 

3.85

 

December15,2025

               
   

7,000

 

3.85

 

December15,2025

               

____________

NOTES:

(1)      The value of unexercised in-the-money options is calculated as the excess, if any, of the product of the difference between the June 30, 2021 closing price on the Nasdaq of $3.18 per Common Share less the option exercise price multiplied by the number of securities underlying the unexercised options.

28

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth as at the year ended June 30, 2021, the number of securities authorized for issuance under the Company’s Option Plan:

Option Plan Category

 

Number of
securities to
be issued upon
exercise of
outstanding
options

 

Weighted-
average
exercise price
of outstanding
options

 

Number of
securities
remaining
available for
future issuance
under equity
compensation
plans(1)

Equity compensation plans approved by security holders

 

912,006

 

$

8.61

 

132,137

Equity compensation plans not approved by security holders

 

 

 

 

Total

 

912,006

 

$

8.61

 

132,137

____________

(1)      The maximum number of Shares issuable under the Option Plan is limited to 20% of the total number of Shares issued and outstanding from time to time. Based upon 8,050,707 shares issued and outstanding as at June 30, 2021, the maximum number of securities remaining available for future issuance under equity compensation plans was 493,387. The figures in this column are based on the Company’s Form S-8 filed with the Securities and Exchange Commission on March 5, 2021 which allows for a maximum of 1,044,143 common shares to be registered pursuant to exercise of options granted under the 2017 Stock Option Plan.

The following table provides the annual burn rate associated with the Company’s Option Plan for each of the Company’s three most recent fiscal years:

Fiscal year

 

Number of
stock options
granted under
the Option
Plan(1)

 

Weighted-average number
of Shares
outstanding(2)

 

Annual
burn rate(3)

2021

 

361,250

 

6,719,830

 

5.38

%

2020

 

52,728

 

5,220,707

 

1.01

%