Avalon Works Corp. – s. 144
Headnote
Application by an issuer for a revocation of a cease trade order issued by the Commission -- cease trade order issued because the issuer failed to file certain continuous disclosure materials required by Ontario securities law -- defaults subsequently remedied by bringing continuous disclosure filings up-to-date -- Issuer has provided an undertaking to the Commission that it will not complete (a) a restructuring transaction involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, (b) a reverse takeover with a reverse takeover acquiror that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or (c) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada, unless the issuer files a preliminary prospectus and a final prospectus with the Ontario Securities Commission and obtains receipts for the preliminary prospectus and the final prospectus from the Director under the Act.
Statutes Cited
Securities Act, R.S.O. 1990, c.S.5, as am., s. 144.
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF AVALON WORKS CORP.
ORDER (Section 144 of the Act)
WHEREAS the securities of Avalon Works Corp. (the Filer) are subject to a temporary cease trade order dated August 6, 2010 made by the Director under paragraph 2 of subsection 127(1) and subsection 127(5) of the Act and a further cease trade order dated August 18, 2010 made by the Director under paragraph 2 of subsection 127(1) of the Act (together, the OSC CTO) directing that trading in the securities of the Filer cease until the OSC CTO is revoked by the Director;
AND WHEREAS the OSC CTO was made on the basis that the Filer was in default of certain filing requirements under Ontario securities law as described in the OSC CTO;
AND WHEREAS the Filer has applied to the Ontario Securities Commission (the Commission) pursuant to section 144 of the Act for a full revocation of the OSC CTO (the Application);
AND UPON the Filer having represented to the Commission that:
1. The Filer was incorporated under the Canada Business Corporations Act on April 6, 2000.
2. The head office of the Filer is located at 237 Argyle Avenue, Ottawa, Ontario, K2P 1B8.
3. The Filer's core competency was one-to-one information technology (IT) consulting. Its IT consulting revenues included fees from a long term, electronic service delivery contract and a variety of smaller assignments. The Filer terminated its operations in 2007.
4. The Filer is a reporting issuer under the securities legislation of the provinces of Ontario, British Columbia, and Alberta. The Filer is not a reporting issuer in any other jurisdiction in Canada.
5. The Filer's authorized capital consists of an unlimited number of common shares (the Common Shares), of which 429,742,200 Common Shares are issued and outstanding. Other than the Common Shares, the Filer has no securities (including debt securities) issued and outstanding.
6. The Filer's Common Shares were listed on the TSX Venture Exchange (TSXV) under the symbol "AWB". However, the TSXV delisted the Filer's Common Shares for failure to maintain the TSXV's minimum listing requirements. The Filer's Common Shares are not currently listed, quoted or traded on any other exchange, marketplace or other facility in Canada or elsewhere.
7. The OSC CTO was issued as a result of the Filer's failure to file interim financial statements for the nine-month period ended May 31, 2010 and accompanying management's discussion and analysis (MD&A) within the timeframe as required under National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) and related certifications as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109) (collectively, the Unfiled Documents).
8. The Unfiled Documents were not filed in a timely manner as a result of financial difficulties. Subsequent to the failure to file the Unfiled Documents, the Filer also failed to file the following documents as required by Ontario securities law:
(a) all audited annual financial statements, together with accompanying MD&As (including statements of executive compensation), as required under NI 51-102 and NI 52-109 certificates for the financial years ended August 31, 2010 to August 31, 2018; and
(b) all unaudited interim financial statements, together with accompanying MD&As, as required under NI 51-102 and NI 52-109 certificates for the interim periods ended May 31, 2010 to May 31, 2019
(together with the Unfiled Documents, the Unfiled Continuous Disclosure).
9. The Filer is also subject to a cease trade order (the BCSC CTO) of the British Columbia Securities Commission (BCSC) dated August 9, 2010 issued in response to the Filer's failure to file its Unfiled Documents.
10. The Filer is also subject to a cease trade order (the ASC CTO) of the Alberta Securities Commission (ASC) dated November 22, 2010 issued in response to the Filer's failure to file its Unfiled Documents (the ASC CTO, the BCSC CTO together with the OSC CTO, the CTOs).
11. The Filer has concurrently applied to the BCSC and the ASC for orders for revocation of the ASC CTO and the BCSC CTO, respectively.
12. Since the issuance of the OSC CTO, the Filer has filed the following on the System for Electronic Document Analysis and Retrieval (SEDAR):
(a) audited annual financial statements, accompanying MD&As and NI 52-109 certificates for the financial years ended August 31, 2017 and August 31, 2018;
(b) unaudited interim financial statements, accompanying MD&As and NI 52-109 certificates for the periods ended November 30, 2017, February 28, 2018, May 31, 2018, November 30, 2018, February 28, 2019 and May 31, 2019;
(c) Form 51-102F6V Statement of Executive Compensation (Venture Issuers) for the years ended August 31, 2018 and 2017; and
(d) audit committee and corporate governance disclosure for the year ended August 31, 2018.
13. The Filer has not filed the following:
(a) the audited financial statements, together with the corresponding MD&As, (including statements of executive compensation), as required under NI 51-102 and NI 52-109 certificates for the financial years ended August 31, 2010 to August 31, 2016; and
(b) the unaudited interim financial statements, together with the corresponding MD&As, as required under NI 51-102 and NI 52-109 certificates for the periods ended May 31, 2010 to May 31, 2017
(collectively, the Outstanding Filings)
14. The Filer has requested that the Commission exercise its discretion in accordance with sections 6 and 7 of National Policy 12-202 Revocation of a Compliance-Related Cease Trade Order (NP 12-202) and elect not to require the Filer to file the Outstanding Filings.
15. Except for the failure to file the Outstanding Filings, the Filer is (i) up-to-date with all of its other continuous disclosure obligations; (ii) is not in default of any of its obligations under the OSC CTO, the ASC CTO and the BCSC CTO; and (iii) is not in default of any requirements under the Act or the rules and regulations made pursuant thereto.
16. Since the issuance of the CTOs, there have been no material changes in the business, operations or affairs of the Filer which have not been disclosed by the Filer via news release and/or material change report and filed on SEDAR.
17. The Filer is not considering nor is it involved in any discussions related to, a reverse take-over, merger, amalgamation or other form of combination or transaction similar to any of the foregoing.
18. The Filer has paid all outstanding activity, participation and late filing fees that are required to be paid to the Commission and has filed all forms associated with such payments.
19. The Filer's SEDAR and System for Electronic Disclosure by Insiders profiles are up-to-date.
20. Other than the OSC CTO, the ASC CTO and the BCSC CTO, the Filer is not in default of its continuous disclosure obligations under Ontario / Alberta / British Columbia securities laws.
21. The Filer has provided the Commission with a written undertaking (the Undertaking) that it will:
(a) hold an annual meeting of shareholders within three months after the date on which the OSC CTO is revoked; and
(b) not complete:
(i) a restructuring transaction involving, directly or indirectly, an existing, or proposed, material underlying business which is not located in Canada,
(ii) a reverse takeover with a reverse takeover acquirer that has a direct or indirect, existing or proposed, material underlying business which is not located in Canada, or
(iii) a significant acquisition involving, directly or indirectly, an existing or proposed, material underlying business which is not located in Canada,
unless
a. the Filer files a preliminary prospectus and a final prospectus with the Commission and obtains receipts for the preliminary and final prospectus from the Director under the Act,
b. the Filer files or delivers with the preliminary prospectus and the final prospectus the documents required by Part 9 of National Instrument 41-101 General Prospectus Requirements (NI 41-101) including a completed personal information form and authorization in the form set out in Appendix A of NI 41-101 for each current and incoming director, executive officer and promoter of the Filer, and
c. the preliminary prospectus and final prospectus contain the information required by applicable securities legislation, including the information required for a probable restructuring transaction, reverse takeover or significant acquisition (as applicable).
22. Upon the issuance of this revocation order, the Filer will issue a news release and file a material change report on SEDAR to announce the revocation of the CTOs, describe the Undertaking and outline the Filer's future plans.
AND UPON considering the Application and the recommendation of the staff of the Commission;
AND UPON the Director being satisfied that it would not be prejudicial to the public interest to revoke the OSC CTO;
IT IS ORDERED pursuant to section 144 of the Act that the OSC CTO is revoked.
DATED at Toronto, Ontario on this 24th day of September 2019.