0941527 B.C. Ltd.
Headnote
Section 144 of the Securities Act (Ontario) -- application for a partial revocation of a cease trade order issued by the Commission -- issuer cease traded due to failure to file certain continuous disclosure documents required by Ontario securities law -- issuer has applied for a partial revocation of the cease trade order to permit the issuer to proceed with a private placement of common shares -- issuer will use proceeds from private placement to prepare and file continuous disclosure documents and pay related fees -- partial revocation granted subject to conditions.
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.
IN THE MATTER OF
THE SECURITIES ACT, R.S.O. 1990, c. S.5, AS AMENDED
(the Act)
AND
IN THE MATTER OF
0941527 B.C. LTD.
ORDER
(Section 144)
WHEREAS the securities of 0941527 B.C. Ltd. (formerly, United Coal Holdings Limited) (the Applicant) are subject to a cease trade order issued by the Director dated April 11, 2016, pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act (the ON Cease Trade Order), directing that all trading in the securities of the Applicant cease until the ON Cease Trade Order is revoked by the Director;
AND WHEREAS the Applicant has applied to the Ontario Securities Commission (the Commission) for a partial revocation of the ON Cease Trade Order pursuant to section 144 of the Act;
AND UPON the Applicant having represented to the Commission that:
1. The Applicant was incorporated pursuant to the Business Corporations Act (British Columbia) on May 20, 1958. On November 12, 2018, the Applicant was dissolved and on July 14, 2022, pursuant to the Business Corporations Act (British Columbia) the company was restored as '0941527 B.C. Ltd.'.
2. The Applicant's head office is located at 833 Seymour Street, Suite 3606, Vancouver, British Columbia V6B 0G4.
3. The Applicant is a reporting issuer under the securities legislation of the provinces of British Columbia, Ontario and Alberta. The Applicant is not a reporting issuer in any other jurisdiction in Canada.
4. The Applicant's authorized share capital consists of an unlimited number of common shares (Common Shares). The Applicant currently has 74,759,220 Common Shares issued and outstanding. Other than the issued and outstanding Common Shares, the Applicant has no securities outstanding.
5. As at the date hereof, no securities of the Applicant are traded in Canada or any other country on a marketplace, as defined in National Instrument 21-101 -- Marketplace Operation, or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
6. The ON Cease Trade Order was issued against the Applicant pursuant to paragraph 2 of subsection 127(1) and subsection 127(4.1) of the Act. The order was made as a result of the Applicant's failure to file the following continuous disclosure materials (i) a comparative financial statement for its financial year ended November 30, 2015, as required under Part 4 of National Instrument 51-102 -- Continuous Disclosure Obligations (NI 51-102), and (ii) a Form 51-102F1 -- Management's Discussion and Analysis (MD&A) for the period ended November 30, 2015, as required under Part 5 of NI 51-102 (collectively, the Unfiled Documents).
7. The Unfiled Documents were not filed in a timely manner as a result of financial difficulties.
8. In addition to the ON Cease Trade Order, the Applicant's securities are also subject to a cease trade order dated April 7, 2016 issued by the British Columbia Securities Commission (the BCSC), pursuant to subsection 171 of the Securities Act (British Columbia), directing that all trading in the securities of the Applicant cease until the order is revoked or varied (the BC Cease Trade Order, together with the ON Cease Trade Order, the Cease Trade Orders).
9. Subsequent to the failure to file the Unfiled Documents, the Applicant also failed to file the following documents:
i. annual audited financial statements for the years ended November 30, 2016, to November 30, 2022, as well as certifications of annual filings for said periods;
ii. interim unaudited financial statements for the interim periods ended February 29, 2016 to February 28, 2023; and
iii. MD&A relating to the financial statements referred to in subparagraphs i and ii above.
(together with the Unfiled Documents, the Unfiled Continuous Disclosure Documents).
10. Other than the failure to file the Unfiled Continuous Disclosure Documents, the Applicant is not in default of any of the requirements of the Act or the rules and regulations made pursuant thereto. The Applicant's SEDAR and SEDI profiles are up to date.
11. The Applicant is seeking a partial revocation of the ON Cease Trade Order to be able to complete a private placement in British Columbia and Ontario (Private Placement) of up to $100,000 by way of an offering of unsecured debentures (Unsecured Debentures), with each Unsecured Debenture to be issued in the principal amount of $1,000, bearing interest at an annual rate of 10% payable in arrears in equal installments semi-annually, and maturing on the date that is 24 months from the date of issuance (Maturity Date).
12. For each distribution made in respect of the Private Placement, the Applicant will comply with one or more of, the accredited investor exemption contained in section 2.3 of NI 45-106, and the family, friends, and business associates exemption contained in section 2.5 of NI 45-106.
13. The Applicant will use the proceeds of the Private Placement to resolve outstanding fees, prepare audited financial statements and pay all other costs associated with applying for a full revocation of the Cease Trade Orders.
14. To the Applicant's knowledge, none of the potential investors are insiders or related parties of the Applicant.
15. The Applicant has also filed an application with the BCSC for a partial revocation of the BC Cease Trade Order in the province of British Columbia.
16. The Applicant estimates that it will require $100,000 in order to apply for and obtain a full revocation order, based upon the following amounts:
i
accounting, audit and legal fees associated with the preparation and filing of the relevant continuous disclosure documents, as well as the preparation of the materials for the annual meeting, Private Placement, and applications for the partial revocation orders and full revocation orders;
$20,000
ii
filing fees associated with obtaining the partial revocation orders and full revocation orders, including fees payable to the applicable regulators, including the Commission and BCSC; and
$65,000
iii
legacy accounts payable, including accounting and legal fees, consulting fees and outstanding transfer agent fees.
$15,000
17. Except for the Outstanding Filings, the Applicant will: (i) following the filing of the Upcoming Filings, be up-to-date with all of its continuous disclosure obligations, (ii) not be in default of any requirements under applicable securities legislation or the rules and regulations made pursuant thereto, except (a) for the existence of the BC Cease Trade Order, and (b) that it has not held its annual general shareholders meeting for 2015 to 2022, and (iii) is not in default of any of its obligations under the Cease Trade Orders.18. The Applicant intends to prepare and file continuous disclosure documents and pay all outstanding fees within a reasonable period of time following the completion of the Private Placement. The Applicant also intends to apply to the applicable securities regulators to have the Cease Trade Orders fully revoked.
19. The Applicant reasonably believes that the Private Placement will be sufficient to bring its continuous disclosure obligations up to date and pay all related outstanding fees and provide it with sufficient working capital to advance its business.
20. The Private Placement will be completed in accordance with all applicable laws.
21. As the Private Placement would involve a trade of securities and acts in furtherance of trades, the Private Placement cannot be completed without a partial revocation of the ON Cease Trade Order.
22. Prior to completion of the Private Placement, the Applicant will:
i. provide any subscriber to the Private Placement with:
(a) a copy of the Cease Trade Orders; and
(b) a copy of the partial revocation orders; and
ii. obtain from each subscriber a signed and dated acknowledgment which clearly states that all of the Applicant securities, including the securities issued in connection with the Private Placement, will remain subject to the Cease Trade Orders and that the issuance of partial revocation orders does not guarantee the issuance of full revocation orders in the future.
23. Upon issuance of the partial revocation order, the Applicant will issue a press release announcing the order and its intention to complete the Private Placement. Upon completion of the Private Placement, the Applicant will issue a press release and file a material change report. As other material events transpire, the Applicant will issue appropriate press releases and file material change reports, as applicable.
AND UPON considering the application and the recommendations of staff of the Commission;
AND UPON the Director being satisfied that to do so would not be prejudicial to the public interest;
IT IS ORDERED, pursuant to Section 144 of the Act, that the ON Cease Trade Order is partially revoked solely to permit the trades in securities of the Applicant (including for greater certainty, acts in furtherance of trades in securities of the Applicant) that are necessary for and are in connection with the Private Placement, provided that:
(a) prior to completion of the Private Placement, the Applicant will:
i. provide to each subscriber under the Private Placement a copy of the Cease Trade Orders;
ii. provide to each subscriber under the Private Placement a copy of this partial revocation order; and
iii. obtain from each subscriber under the Private Placement a signed and dated acknowledgment, which clearly states that all of the Applicant's securities, including the securities issued in connection with the Private Placement, will remain subject to the Cease Trade Orders, and that the issuance of a partial revocation order does not guarantee the issuance of a full revocation order in the future.
(b) The Applicant will make available a copy of the written acknowledgements referred to in paragraph (a)(iii) to staff of the Commission on request; and
(c) This order will terminate on the earlier of the closing of the Private Placement and 60 days from the date hereof.
DATED this 31st day of August, 2023.
OSC File #: 2023/0259