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EQUITY | 12 Months Ended
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Dec. 31, 2024
EQUITY |
EQUITY |
6. | EQUITY
​ The Company has authorized an unlimited number of both Common and Preferred shares. As of December 31, 2024 and 2023, the Company had 32,689,190 and 18,885,254 issued and outstanding Common Shares, respectively, and 0 and 1,166,667 issued and outstanding Series 2 Convertible Preferred Shares, respectively. All share classes have no par value. Common Shares reserved for future issuance consists of the following: ​
​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
​ | ​ | 2024 |  | 2023
Warrants | ​ | 57,141,386 |  | 13,595,987
Series 2 Convertible Preferred Shares | ​ | — |  | 1,166,667
Options issued and outstanding under stock option plan | ​ | 3,574,453 |  | 898,262
Deferred Share Units granted | ​ | 1,061 |  | 1,061
Common Shares available for grant under stock option plan | ​ | 2,963,385 |  | 471,843
Total Common Shares reserved for future issuance | ​ | 63,680,285 |  | 16,133,820
​ Common Shares The preferences, privileges, and rights of the Common Shares are as follows: Voting Subject to any special voting rights or restrictions, holders of common shares entitled to vote shall have one vote per share. Dividends The Company’s board of directors may from time to time declare and authorize payment of dividends, if any, as they may deem advisable and need not give notice of such declaration to any shareholder. Subject to the rights of common shareholders, if any, holding shares with specific rights as to dividends, all dividends on common shares shall be declared and paid according to the number of such shares held and paid in Canadian dollars. Liquidation Rights In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of the Company’s assets for the purpose of winding up the Company’s affairs, after the payment of dividends declared but unpaid, the holders of Common Shares shall be entitled pari passu to receive any remaining property of the Company. Series 2 Convertible Preferred Shares In November 2023, the directors of the Company authorized the issuance of an unlimited number of Series 2 Convertible Preferred Shares (“Series 2 Shares”). In December 2023, the Company entered into an agreement with holders of the Company’s Series 1 Convertible Preferred Shares (“Series 1 Shares”) to exchange all 70,000,000 outstanding Series 1 Shares for 1,166,667 Series 2 Shares (an equivalent number of as-converted Common Shares) in exchange for the Series 1 Shareholders waiving their rights under a financing limitation side letter entered into amongst the Company and the Series 1 Shareholders during the August 2023 PIPE. Following the Series 2 exchange, the Company was no longer subject to any financing limitations and there were no longer any Series 1 Shares outstanding. The Series 2 Shares carry the same rights and privileges as the Series 1 Shares, except the mandatory conversion threshold which was increased as described below. The Company treated the exchange for Series 2 Shares as a modification of the Series 1 Shares and determined there was no material difference in fair value between the Series 2 Shares and the Series 1 Shares, and as such no deemed dividend was recognized in the consolidated financial statements as a result of the exchange. The Series 2 Shares have the following preferences, privileges and rights: Dividends If the Company declares, pays or sets aside any dividends on shares of any other class or series of capital stock the holders of the Series 2 Shares shall receive a dividend on each outstanding share of Series 2 Shares in an amount equal to that dividend per share of the Preferred Share as would equal the product of the dividend payable as if all shares of such series had been converted into Common Shares. Liquidation In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Series 2 Shares shall be entitled to be paid out of the assets of the Company available for distribution to the shareholders an amount per share equal to $6.00, plus any dividends declared but not paid. If, upon any such liquidation event, the assets available for distribution to the shareholders are insufficient to pay the holders of the Series 2 Shares, the holders of the Series 2 Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Voting The Series 2 Shares do not confer any voting rights or privileges. Redemption The Series 2 Shares are not subject to mandatory redemption or other redemption provisions for which the events resulting in redemption are not within the Company’s control. Optional Conversion Series 2 Shares are convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, at ratio of 1 Series 2 Share into 1 Common Share. Mandatory Conversion All outstanding Series 2 Shares shall automatically convert into Common Shares, at the effective conversion rate upon the closing of one singular financing, including a financing with multiple tranches in which any subsequent tranches are closed within 18 months of the initial closing, which financing results in at least single sale, executable in one or more tranches, of equity securities resulting in at least $14.0 million of cumulative gross proceeds to the Company. The July 2024 PIPE (defined below) qualified as a mandatory conversion event for the Series 2 Shares, whereby all 1,166,667 outstanding Series 2 Shares converted into 1,166,667 fully paid non-assessable Common Shares upon the closing of the transaction. Following the mandatory conversion event, there were no outstanding Series 2 Shares. Equity Transactions Functional Currency Change Following the change in functional currency effective July 1, 2023, the Company reassessed the classification of its historical US$ and C$ denominated warrants in accordance with the Company’s accounting policy for warrants. As a result of the reassessment, the Company determined that 870,026 US$ warrants to purchase Common Shares, originally issued in financing transactions in 2021 and 2022, previously classified as warrant liabilities met the criteria under ASC 815-40 for permanent equity classification. The fair value of US$ warrants of $1,287,400, calculated using a Black Scholes calculation as of June 30, 2023, was reclassified from warrant liability to additional paid-in-capital in the accompanying consolidated financial statements. The fair value of the US$ warrants represented the entirety of the Company’s warrant liability as of June 30, 2023. The US$ warrants will not be re-measured prospectively. As result of the reassessment the Company determined that 687,591 C$ warrants, originally issued in financing transactions between 2018 and 2020, which were previously classified in permanent equity no longer met the criteria for equity classification. The C$ warrants were remeasured as of July 1, 2023. The C$ warrants have exercise prices between C$12.00 and C$28.80 and expire between January 2024 and November 2025. The Company measured the fair value of the C$ warrants on July 1, 2023 using a Black Scholes calculation and the resulting fair value of $396,375 was recorded as a reclassification from additional paid-in-capital to warrant liability. The C$ warrant liability was subsequently re-measured at December 31, 2023 to a fair value of $94,185, with the change in fair value of $302,190 reported in other income in the accompanying consolidated statement of operations and comprehensive income (loss). The C$ warrants liability was re-measured at December 31, 2024 to a fair value of $5,592, with the change in fair value of $88,593 reported in other income in the accompanying consolidated statement of operations and comprehensive income (loss). The weighted-average values of the significant assumptions used in the Black Scholes valuation of the C$ warrants as of December 31, 2023 included volatility of 131.5%, a risk-free rate of 3.88%, exercise price of C$12.60 and an expected term of 1.8 years. The weighted-average values of the significant assumptions used in the Black Scholes valuation of the C$ warrants as of December 31, 2024 included volatility of 110.2%, a risk-free rate of 2.93%, exercise price of C$12.00 and an expected term of 0.9 years. July 2024 Private Placement On July 26, 2024, the Company entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) to raise $30,332,984 in aggregate gross proceeds for the Company (the “July 2024 PIPE”) before deducting $2,675,487 in placement agent fees and other expenses. All gross proceeds were received by the Company as of December 31, 2024. Pursuant to the terms of the Unit Purchase Agreement, the Company agreed to sell to PIPE Investors in the Offering, an aggregate of (x) 9,757,669 common share units (the “Common Share Units”), each consisting of (i) one Common Share, (ii) one Tranche A Common Share purchase warrant to purchase one Common Share, (iii) one Tranche B Common Share purchase warrant to purchase one Common Share and (iv) one Tranche C Common Share purchase warrant to purchase one Common Share (each, a “Warrant”, collectively, the “Warrants”) and, for certain investors, (y) 4,371,027 pre-funded units (the “Pre-Funded Units” and together with the Common Share Units, the “Units”), each consisting of (i) one Pre-Funded Warrant to purchase one Common Share (each, a “Pre-Funded Warrant”, collectively, the “Pre-Funded Warrants”, and the Common Shares issuable upon exercise of the Warrants and the Pre-Funded Warrants, the “Warrant Shares”), (ii) one Tranche A Common Share purchase warrant to purchase one Common Share, (iii) one Tranche B Common Share purchase warrant to purchase one Common Share and (iv) one Tranche C Common Share purchase warrant to purchase one Common Share. The purchase price for each Common Share Unit was $2.15 per Common Share Unit, and the purchase price for each Pre-Funded Unit was $2.14 per Pre-Funded Unit. The Pre-Funded Warrants have an exercise price of $0.01 per Warrant Share, are immediately exercisable and will expire when exercised in full. The Tranche A Common Share purchase warrants have an exercise price of $2.02, for aggregate gross proceeds of up to $28.5 million, are exercisable immediately upon Shareholder Approval (as defined below) and will expire upon the earlier of (i) 18 months or (ii) within 60 days of the Tranche A Milestone Event (as defined below). The Tranche B Common Share purchase warrants have an exercise price of $2.02, for aggregate gross proceeds of up to $28.5 million, are exercisable immediately upon Shareholder Approval (as defined below) and will expire upon the earlier of (i) 30 months or (ii) within 60 days of the Tranche B Milestone Event (as defined below). The Tranche C Common Share purchase warrants have an exercise price of $2.50, for aggregate gross proceeds of up to $35.3 million, are immediately exercisable and will expire on July 31, 2029. For purposes of the foregoing, “Tranche A Milestone Event” means the public announcement via press release or the filing of a Current Report on Form 8-K of 6-month data from the cohorts treated with multiple ascending doses of PMN310, and “Tranche B Milestone Event” means the public announcement via press release or the filing of a Current Report on Form 8-K of 12-month data from the cohorts treated with multiple ascending doses of PMN310. Pursuant to Nasdaq Listing Rule 5635(d), the exercise of the Tranche A and Tranche B Common Share purchase warrants is subject to shareholder approval (the “Shareholder Approval”). The Company agreed to convene a shareholders’ meeting, or otherwise obtain written Shareholder Approval, on or before 90 days following the Closing Date, to obtain such approval. The AB Warrants were classified as liabilities (“AB Warrant Liability”) and recorded at fair value utilizing level 3 inputs at issuance due to the requirement for Shareholder Approval. Under the applicable accounting guidance, the requirement for Shareholder Approval precludes a financial instrument from equity classification, as it cannot be considered indexed to the Company's own stock. The preclusion is because of the potential of the settlement amount differing than a fixed for fixed option on the Company's shares. The fair value of the AB Warrant Liability at issuance was determined to be $31,182,033, calculated using a Black Scholes calculation on July 26, 2024 with the following weighted average assumptions: share price of $2.02, the most currently available Nasdaq Official Closing Price for the Company’s Common Shares when the Company entered into the purchase agreements, exercise price of $2.02, volatility of 102.5%, risk-free rate of 4.34%, and a term of 2.1 years. The Company incurred offering costs totaling $2,675,487 that consisted of placement agent fees and direct incremental legal, advisory, accounting and filing fees relating to the July 2024 PIPE, resulting in net cash proceeds of $27,657,497. The value of the AB Warrants exceeded the net proceeds received. As a result, the entire proceeds and offering costs were allocated to the AB Warrant liability, and also resulted in a loss on issuance of common shares, warrants, and pre-funded warrants of $3,524,535, which was recorded in other income (expense) in the consolidated statements of operations and comprehensive income (loss). On October 23, 2024, Shareholder Approval for the Tranche A and B Warrants was obtained during the Company’s Special Meeting of Shareholders. Following Shareholder Approval, the Company determined that the AB Warrants met the criteria for equity classification. The Company re-measured the fair value of the AB Warrant Liability at October 23, 2024 to $8,689,149, calculated using a Black Scholes calculation with the following weighted average assumptions: volatility of 100.9%, share price of $0.95, exercise price of $2.02, risk-free rate of 4.10%, and a term of 1.9 years. The change in fair value of the AB Warrant Liability of $22,492,884 was recorded in other income (expense) in the consolidated statements of operations and comprehensive income (loss) and the remaining fair value of $8,689,149 was reclassified from liability to additional paid-in-capital in the consolidated balance sheet. A summary of warrant liability activity, which are based on level 3 inputs, for the years ended December 31, 2024 and 2023 is as follows: ​
​ | ​ | ​ | ​
​ |  | December 31,
​ | ​ | 2024
Fair value at December 31, 2023 | ​ | $ | 94,185
July 2024 PIPE AB Warrant Liability at issuance | ​ |  | 31,182,033
Change in fair value of 2024 PIPE AB Warrant Liability | ​ | ​ | (22,492,884)
Reclassification of 2024 PIPE AB Warrant Liability to equity | ​ | ​ | (8,689,149)
Change in fair value of C$ warrant liability | ​ | ​ | (88,593)
Fair value at December 31, 2024 | ​ | $ | 5,592
​
​ | ​ | ​ | ​
​ | ​ | December 31,
​ | ​ | 2023
Fair value at December 31, 2022 | ​ | $ | 1,859,374
Change in fair value of the warrant liability | ​ |  | (564,548)
Foreign exchange loss | ​ |  | (7,426)
Fair value of US$ warrant liability as of June 30, 2023 | ​ | ​ | 1,287,400
Fair value of previously liability-classified US$ warrants reclassified to additional paid-in-capital as of July 1, 2023 | ​ | ​ | (1,287,400)
Fair value of previously equity-classified C$ warrants reclassified to warrant liability as of July 1, 2023 | ​ | ​ | 396,375
Change in fair value of C$ warrant liability | ​ | ​ | (302,190)
Fair value at December 31, 2023 | ​ | $ | 94,185
​ August 2023 Private Placement In August 2023, through a private placement (“August 2023 PIPE”), the Company issued 9,945,969 Common Shares, and, in lieu of Common Shares, Pre-Funded Warrants to purchase an aggregate of 954,725 Common Shares, and, in each case, accompanying Common Warrants to purchase an aggregate of up to 10,900,604 additional Common Shares at a unit price of $1.88 per Common Share and accompanying Common Warrant (or $1.87 per Pre-Funded Warrant and accompanying Common Warrant). The private placement resulted in aggregate gross proceeds of $20,483,758 before $2,738,558 of issuance costs. The Common Warrants are exercisable for five years commencing six months after the issuance date at a price of $1.75. The Company determined the Pre-Funded Warrants and Common Warrants both met the permanent equity criteria classification. The Pre-Funded Warrants and Common Warrants are classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the Common Shares with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of common shares upon exercise. In addition, the Pre-Funded Warrants and Common Warrants do not provide any guarantee of value or return. The Company used a Black Scholes calculation to determine the fair value of the Common Warrants at issuance and allocated a share of the net proceeds based on the relative fair value of the Common Warrants. Net proceeds allocated to the Common Warrants were $7,972,736, with the remaining net proceeds of $9,772,464 allocated to the Common Shares. The aggregate net proceeds of the transaction are recorded in additional paid-in-capital. The Company also issued 327,020 compensation warrants to purchase Common Shares as compensation to a placement agent as part of the August 2023 PIPE. The compensation warrants have an exercise price of $1.75 and expire in February 2029. The Company used a Black Scholes calculation to determine the fair value of the compensation warrants at the issuance date. The fair value of $466,658 of issuance costs are recorded in additional-paid-in capital, which results in a net zero impact to additional paid-in-capital and issuance costs. Significant assumptions used in the Black Scholes calculation included risk free interest rate of 4.36%; historical volatility of 107.3%; and a 5.5-year expiry. ​ At-the-Market Offering (ATM) In September 2023, the Company filed a shelf registration statement with the SEC. In conjunction with the shelf registration, the Company entered into an ATM agreement in January 2024 to offer up to $25.0 million of the Company’s Common Shares. During the year ended December 31, 2024, the Company sold 75,862 Common Shares for net proceeds of $190,274 after deducting sales commissions.

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