The following are relevant extracts of the Circular which are disclosed by Thallion in response to Jaguar's statements and actions, subject to the assumptions and qualifications to be contained in the Circular.
-- Assuming the Net Cash at the effective date is $8,000,000 (including deemed proceeds for the exercise or cancellation as per the Arrangement of "in-the-money" options of approximately $500,000), the cash consideration payable to shareholders on the effective date would amount to approximately $0.1904 per share.-- The Net Cash calculated as of May 31, 2013 estimated by Management of Thallion for illustration purposes only is approximately $8,200,000 to $8,400,000 (including deemed proceeds for the exercise or cancellation as per the Arrangement of "in-the-money" options of approximately $500,000 and net of severance costs referred to below and other costs included in the Net Cash definition, including lease termination costs and transaction expenses). Although Management believes that the estimate of the Net Cash as of May 31, 2013 is reasonable based on information currently available to Thallion, the actual amount of the estimated Net Cash may differ materially from Management's estimates for a variety of reasons, including (i) to the extent there are material unforeseen costs or liabilities to be reflected in the Net Cash calculation, (ii) estimated transaction expenses which remain subject to variations, including as a result of Jaguar's actions, and (iii) to the extent that there are any unforeseen movements in Thallion's cash balances pursuant to its ongoing operations from May 31, 2013 until the effective date. Thallion and BELLUS intend to issue a further press release on or about July 30, 2013 announcing any adjustments to the purchase price relating to estimated Net Cash.-- Liquidation Scenario Summary -- It is expected that a liquidation would take a minimum of three years to complete. -- The amount by which it is estimated that assets would exceed liabilities would be reduced after three years to between $6,600,000 and $7,000,000 in aggregate, or between $0.1840 and $0.1951 per share (on a fully-diluted basis). It is possible that the liquidation could take longer than three years to complete, in which event the amount available for distribution would be further reduced. -- In addition, subject to the terms and conditions of an indemnity agreement with Premium Brands Holding Corp. ("Premium Brands"), up to approximately $1,450,000 (or $0.04 per share (on a fully-diluted basis)), may be received by Thallion as additional purchase price consideration payable by Premium Brands to Thallion on or about July 2016. There is no certainty that any such additional purchase price may be payable under the indemnity agreement which remains subject to the satisfaction of certain conditions. -- A substantial portion of available cash may not be distributed to shareholders before the expiry of certain indemnification obligations of Thallion, including of up to $4,425,000 towards Premium Brands under the indemnity agreement until July 2016. Based on the foregoing and the assumptions and qualifications to be detailed in the Circular, it is estimated that the initial distribution to shareholders would likely be between $0.0613 and $0.1233 per share and that such distribution would occur on or about four to six months after the initiation of a liquidation process (subject to obtaining customary tax clearance certificates). -- The distributions by Thallion to the shareholders after the initiation of a liquidation process would be made to the shareholders as a reduction of stated capital of the common shares to the extent thereof, and thereafter, if necessary, as dividends, with the shareholders sharing rateably, share for share, in the distribution proceeds. Thallion currently reasonably estimates that the stated capital of the common shares is equal to approximately $3.5 million as of May 31, 2013 which is much lower than what Jaguar's statements seem to suggest. -- The amount of all distributions exceeding the paid-up capital for tax purposes (which is generally equal to the stated capital, subject to certain adjustments where applicable) of the common shares immediately prior to the winding up would be treated as a taxable dividend under the Income Tax Act (Canada). Thallion currently reasonably estimates that the paid-up capital of the common shares is equal to approximately $3.5 million as of May 31, 2013. The steps of the Arrangement maximize the use of the available paid-up capital for the benefit of shareholders. -- There is no guarantee that a third-party may wish to purchase Shigamabs® in the context of a liquidation at terms better than those provided by BELLUS. As part of the strategic review process of Thallion, no other party presented expressions of interest for the development, investment in, ownership of or monetization of Shigamabs® at terms better than those provided by BELLUS. The Phase II clinical trial of TLN-4601 was terminated early in December 2009 due to lack of efficacy and Thallion announced in June 2010 that the rights to TLN-232 were returned to its licensor.